Gold futures ended lower for second straight session on Monday, as investors tracked some sharply declining global equity markets on worries of global economic slowdown with further soft data from China strengthening the stand.
European markets ended solidly in negative territory as concerns over China returned to the forefront, after some disappointing economic data. Worries over China prompted further weakness in commodity prices.
U.S. stocks were trading deeply in the red after some weak economic cues out of China, once again raising concerns about the health of the global economy. The Dow Jones Industrial Average is currently down 1.51 percent, the Nasdaq is trending lower by 2.68 percent, and the S&P 500 is down 2.14 percent.
China’s industrial profits declined in August as product prices continued to decrease, the National Bureau of Statistics reported Monday. Falling product prices as well as lower return on investment weighed on industrial profits.
Meanwhile, economic news from the U.S. showed National Association of Realtors’ pending home index, a measure of strength in the housing market, unexpectedly declined in August, raising concerns that home sales might be poised for a decline in the near future.
Last week, gold prices dropped after clarification from the U.S. Federal Reserve that a rate hike is appropriate in either October or December. Fed Chief Janet Yellen addressing an audience at the University of Massachusetts said if the FOMC were to delay the start of the policy normalization process for too long, it would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting its goals.
Gold for December delivery, the most actively traded contract, dropped $13.90 or 1.2 percent, to settle at $1,131.70 an ounce, on the Comex division of the New York Mercantile Exchange Monday.
Gold for December delivery scaled an intraday high of $1, 147.80 and a low of $1,127.30 an ounce.
On Friday, gold prices for December delivery dropped $8.20 or 0.7 percent, to settle at $1,145.60 an ounce, after the U.S. Federal Reserve Chief Janet Yellen in an address at the University of Massachusetts said a rate hike is appropriate in either October or December.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose to 684.14 tons on Monday from its previous close of 680.27 tons on Friday.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.00 on Monday, down from its previous close of 96.22 in late North American trade on Friday. The dollar scaled a high of 96.50 intraday and a low of 95.90.
The euro trended higher against the dollar at 1.1243 on Monday, as compared to its previous close of 1.1199 in North American trade late Friday. The euro scaled a high of 1.1250 intraday and a low of 1.1148.
On the economic front, the National Association of Realtors’ measure of strength in the U.S. housing market unexpectedly declined for August, raising concerns that home sales figures might be poised for a decline in the near future. The National Association of Realtors’ pending home index fell 1.5 percent in August. Economists expected a 0.5 percent increase for the month.
Consumer spending rose a little more than economists had predicted last month, according to new government statistics released Monday. This came despite a slower-than-expected expansion in income.
Data released by the U.S. Department of Commerce showed that personal spending rose by 0.4 percent in August. Economists had expected the figure to rise by 0.3 percent.
Personal income also increased during the month. The figures showed a 0.3 percent advance during August, below expectations of a 0.4 percent increase.
China’s industrial profits declined in August as product prices continued to decrease, the National Bureau of Statistics reported Monday. Industrial profits fell 8.8 percent in August from a year ago, following a 2.9 percent drop in July.
England/Wales house price growth eased to a 21-month low in August, data from Land Registry showed Monday. House prices advanced 4.2 percent year-on-year in August, which was the slowest growth since November 2013, when it climbed 3.5 percent. In July, house prices rose 4.6 percent and by 4.9 percent in June.
The material has been provided by InstaForex Company – www.instaforex.com