Gold Surges To Settle Above $1,300

(RTTNews) - Gold futures soared to end at a one-month high Monday, as the dollar weakened against a basket of major currencies after some weaker-than-expected U.S. existing home sales in June, fueling expectations the U.S. Federal Reserve will continue to maintain its monetary stimulus policy. It was the biggest one-day gain for gold in more than a year.

The precious metal, which surpassed the $1,300-mark for the first time in four weeks, also perked up on anticipation of an uptick in demand from China after its central bank eased restrictions on lending interest rates last week.

U.S. existing home sales fell more than expected in June, data from the National Association of Realtors showed on Monday. Notwithstanding the decline, rate for June was the second-highest since November 2009, as buyers scrambled to lock in low interest rates that have been on the rise this summer.

Gold for August delivery, the most actively traded contract, surged $43.10 or 3.3 percent to close at $1,336.00 an ounce Monday on the Comex division of the New York Mercantile Exchange.

Gold for August delivery scaled an intraday high of $1,339.10 and a low of $1,295.40 an ounce.

Last week, gold gained just over 1 percent after the Federal Reserve Chairman Ben Bernanke clarified there was no set time line before the central bank start to taper down its quantitative easing program. Bernanke indicated the U.S. economic recovery has continued at a moderate pace but the jobs situation remains "far from satisfactory.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 932.46 tons from 935.17 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.17 on Monday, down from 82.62 late Friday in North American trade. The dollar scaled a high of 82.55 intraday and a low of 82.05.

The euro traded higher against the dollar at $1.3195 on Monday, as compared to $1.3139 late Friday in North America. The euro scaled a high of $1.3218 intraday and a low of $1.3138.

In economic news from the U.S., the National Association of Realtors said June existing home sales on a seasonally adjusted basis fell 1.2 percent to an annual rate of 5.08 million from a downwardly revised 5.14 million in May. Economists expected existing home sales to rise to around 5.25 million.

Elsewhere, the euro area government debt continued to increase in the first quarter, with the highest burden in Greece, data from Eurostat showed. The government debt to GDP ratio rose to 92.2 percent at the end of the first quarter, from 90.6 percent at the end of the fourth quarter of 2012. Securities, other than shares, accounted for 77.1 percent of general government debt. Greece logged the highest debt of 160.5 percent of GDP, followed by Italy with 130.3 percent and Portugal with 127.2 percent. The lowest ratios were seen in Estonia, Bulgaria and Luxembourg.

U.K. household finance sentiment was at its strongest level since the survey began in February 2009, data from Markit Economics showed Monday. The headline household finance index that measures changes in consumer behavior, rose to 41.5 in July from 40.8 in June. Nonetheless, the reading remained below the neutral 50 mark.

Germany's economic growth is set to slow in the third quarter, following a rebound in the second quarter of the year, Bundesbank said in its monthly bulletin on Monday. The central bank indicated signs of slowing down of economic growth were stronger.