Investing.com - Gold futures were higher on Monday, as the U.S. dollar tumbled after Larry Summers pulled out of the race to be the next head of the Federal Reserve, while weak U.S. economic data also boosted prices.
Traders now turned their attention to this week's U.S. monetary policy decision on Wednesday.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,319.40 a troy ounce during U.S. morning hours, up 0.85%.
Gold prices rose by as much as 1.9% earlier in the day to hit a session high of USD1,334.60 a troy ounce. The December contract ended 1.65% lower on Friday to settle at USD1,308.60 a troy ounce.
Gold futures were likely to find support at USD1,304.80 a troy ounce, Friday’s low and resistance at USD1,365.70, the high from September 12.
The U.S. dollar came under pressure after Summers pulled out of the race to be the next Fed chairman, easing investor concerns that he would aggressively scale back economic stimulus measures.
“I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing recovery,” Summers wrote in a letter to President Barack Obama.
Summers’ withdrawal leaves Fed Vice Chairwoman Janet Yellen as the frontrunner for the job, who some analysts say may favor a slower reduction in U.S. stimulus.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.55% to hit 81.23, the lowest level since August 28.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Meanwhile, investors shifted their focus to the Fed’s upcoming two-day policy meeting, which concludes on Wednesday, amid ongoing speculation over the timing of the central bank’s widely expected reduction in monthly bond purchases.
Data released on Monday showed that the Empire State manufacturing index fell to a four-month low of 6.29 in September from a reading of 8.24 in August. Analysts had expected the index to rise to 9.2.
The soft data added to doubts over whether the Fed will decide to start unwinding its USD85 billion-a-month bond buying program this month.
Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.
The precious metal is on track to post a loss of nearly 21% on the year as traders bet an improving U.S. economy would lead the Fed to unwind its stimulus program by the year's end.
Elsewhere on the Comex, silver for December delivery rallied 1.6% to trade at USD22.07 a troy ounce, while copper for December delivery advanced 1% to trade at USD3.236 a pound.
Traders now turned their attention to this week's U.S. monetary policy decision on Wednesday.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,319.40 a troy ounce during U.S. morning hours, up 0.85%.
Gold prices rose by as much as 1.9% earlier in the day to hit a session high of USD1,334.60 a troy ounce. The December contract ended 1.65% lower on Friday to settle at USD1,308.60 a troy ounce.
Gold futures were likely to find support at USD1,304.80 a troy ounce, Friday’s low and resistance at USD1,365.70, the high from September 12.
The U.S. dollar came under pressure after Summers pulled out of the race to be the next Fed chairman, easing investor concerns that he would aggressively scale back economic stimulus measures.
“I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing recovery,” Summers wrote in a letter to President Barack Obama.
Summers’ withdrawal leaves Fed Vice Chairwoman Janet Yellen as the frontrunner for the job, who some analysts say may favor a slower reduction in U.S. stimulus.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.55% to hit 81.23, the lowest level since August 28.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Meanwhile, investors shifted their focus to the Fed’s upcoming two-day policy meeting, which concludes on Wednesday, amid ongoing speculation over the timing of the central bank’s widely expected reduction in monthly bond purchases.
Data released on Monday showed that the Empire State manufacturing index fell to a four-month low of 6.29 in September from a reading of 8.24 in August. Analysts had expected the index to rise to 9.2.
The soft data added to doubts over whether the Fed will decide to start unwinding its USD85 billion-a-month bond buying program this month.
Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.
The precious metal is on track to post a loss of nearly 21% on the year as traders bet an improving U.S. economy would lead the Fed to unwind its stimulus program by the year's end.
Elsewhere on the Comex, silver for December delivery rallied 1.6% to trade at USD22.07 a troy ounce, while copper for December delivery advanced 1% to trade at USD3.236 a pound.