Gold futures modestly higher after China GDP data

Investing.com - Gold futures were modestly higher on Monday, after official data showed that China’s economy grew in line with market expectations in the second quarter.

The precious metal remained support as fears of an imminent winding down of the Federal Reserve's monetary stimulus eased for now.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,286.55 a troy ounce during European morning hours, up 0.7% on the day.

Comex gold prices held in a tight USD10-range between USD1,283.45, the daily low and a session high of USD1,293.55 a troy ounce.

Comex gold prices rose to USD1,297.05 a troy ounce on July 11, the strongest level since June 24.

Gold futures were likely to find support at USD1,237.05 a troy ounce, the low from July 8 and near-term resistance at USD1,301.75, the high from June 21.

Official data showed that Chinese gross domestic product expanded 7.5% in the second quarter from a year earlier, following growth of 7.7% in the three months to March and in line with expectations.

Separate reports showed that Chinese retail sales rose to13.3% on a year-over-year basis in June, up from 12.9% in May, while industrial production declined to 8.9% in June from 9.2% the previous month.

Investors now looked ahead to the release of U.S. retail sales data later in the day to further gauge the strength of the U.S. economy and the direction of U.S. monetary policy.

Gold prices rallied 5% last week, the biggest weekly gain since October 2011, after Federal Reserve Chairman Ben Bernanke said the central bank will continue to maintain accommodative monetary policy for the foreseeable future.

Bernanke is due to testify to Congress on Wednesday and Thursday.

Gold prices are on track to post a loss of 23% on the year, the worst yearly decline since 1981, amid speculation the Fed will start to unwind its stimulus program by the year's end.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

Elsewhere on the Comex, silver for September delivery rose 0.7% to trade at USD19.93 a troy ounce, while copper for September delivery was little changed to trade at USD3.155 a pound.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.