Gold futures closed lower for a second straight day Monday, mostly on some negative economic news from across the world with China cutting down its economic growth target for the year. Prices were also impacted by some weak economic data from Europe and the U.S.
Gold for April delivery, the most actively traded contract, dropped $5.90 or 0.3 percent to $1703.90 an ounce Monday on the Comex division of the New York Mercantile Exchange. Gold traded at an intraday high of $1,718.00 an ounce and a low of $1,694.40 an ounce.
The precious metal had registered a loss of about 3.7 percent last week with investors preferring to drop riskier assets. Gold prices dropped more than 4 percent on Wednesday after the U.S. Fed failed to give any indication of further quantitative easing.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.31 on Monday, down from 79.82 late on Friday. The dollar had scaled a high of 79.58 intraday.
The euro made gains against the dollar, reversing a three-day decline, as traders weighed the impact of China lowering its economic growth target for the year. Investors also await some key data from Europe and the U.S. during this week, including the Greek bond swap deal.
The euro traded higher against the dollar at $1.3224 on Monday, from $1.3197 late Friday. The euro had scaled a high of $1.3240 intraday.
China lowered its economic growth target for the year, indicating a deviation from its focus on rapid growth. China will now aim for 7.5 percent economic growth this year, Premier Wen Jiabao said on Monday at the annual meeting of the National People's Congress in Beijing. China had maintained the growth target at 8 percent for the past eight years.
The Chinese economy expanded 9.2 percent in 2011, easing from 10.4 percent in 2010.
Activity in the U.S. service sector unexpectedly expanded to 57.3 in February from 56.8 in January, according to the Institute for Supply Management in a report on Monday. A reading above 50 indicates growth in the service sector. Economists expected the index to edge down to 56.0.
Nevertheless, the ISM employment index declined to 55.7 percent from 57.4 percent last month, with the price index inflation gauge surging to 68.4 percent from 63.5 percent last month.
The eurozone composite purchasing managers index dropped to 49.3 in February from 50.4 in January, below the prior preliminary estimate of 49.7, according to data released by Markit Monday. A reading of less than 50 is indicative of contraction in private-sector business.Read More
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