Gold Soars, Ends Above $1,200 On Greece, Fed Meet

(RTTNews) - Gold futures surged to end at a two-week high Monday, on continued uncertainty over Greece's financial woes, even as investors await hints from the U.S. Federal Reserve's monetary policy meet later this week on its interest rate hike plans. The Fed is expected to provide some clarity on when it will raise interest rates Wednesday.

Traders are betting that the move will happen in either July or September, but recent comments from Fed officials suggest the central bank is divided on when to proceed.

Meanwhile, Greece is making little progress at resolving its financial troubles, although is reportedly making adjustments to its team negotiating with international creditors, after last week's meeting in Latvia failed to find any agreement.

The country's alternate foreign minister, Euclid Tsakalotos, will now be leading the negotiating team. The move would reduce the influence of Greek finance minister Yanis Varoufakis on the negotiations.

Italy's Economy Minister Pier Carlo Padoan on Monday said there were no discussions taking place among European policymakers regarding an alternative plan for Greece, if talks with donors failed. He urged Greek authorities to hasten with reform proposals to reach a deal with creditors to access the much needed funding.

Gold for June delivery, the most actively traded contract, jumped $28.20 or 2.4 percent to settle at $1,203.20 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.

Gold for June delivery scaled an intraday high of $1,206.70 and a low of $1,177.60 an ounce.

On Friday, gold futures dropped $19.30 or 1.6 percent to settle at $1,175.00 an ounce, with high of $1,195.40 and a low of $1,174.10.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 742.35 tons from its previous close of 739.06 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.80 on Monday, down from its previous close of 96.96 on Friday in late North American trade. The dollar scaled a high of 97.28 intraday and a low of 96.47.

The euro trended higher against the dollar at $1.0882 on Monday, as compared to its previous close of $1.0873 in North American trade late Friday. The euro scaled a high of $1.0927 intraday and a low of $1.0821.

On the economic front, Germany's import prices continued to decline in March but the pace of decrease slowed for the second month, data from Destatis showed Monday.

Import prices fell by less-than-expected 1.4 percent in March from last year, following a 3 percent drop in February. Prices were expected to fall 2 percent. Nonetheless, the import price index has been falling since January 2013.

Meanwhile, Fitch Ratings downgraded sovereign ratings of Japan citing lack of structural measures to replace the deferred sales tax hike. The credit rating was lowered to 'A' from 'A+' and the outlook on the rating was stable.

Moody's had downgraded Japan's rating in December after the government delayed the second sales tax hike.