Investing.com - Gold edged higher on Monday, as appetite for the precious metal improved following the release of disappointing U.S. economic data.
The National Association of Realtors said its pending home sales index inched up 0.2% in October, disappointing expectations for a gain of 1.5%.
The report came shortly after market research group Kingsbury International said its Chicago purchasing managers’ index tumbled by 7.5 points 48.7 this month from a reading of 56.2 in October. Analysts had expected the index to fall 2.2 points to 54.0 in November.
Gold for February delivery on the Comex division of the New York Mercantile Exchange tacked on $6.60, or 0.62%, to trade at $1,062.80 a troy ounce during U.S. morning hours. Prices fell to $1,051.60 on Friday, the lowest since February 2010.
Gains were expected to remain limited due to a broadly stronger U.S. dollar and growing confidence the Federal Reserve will raise interest rates when in meets next month.
Prices of the precious metal declined $13.80, or 1.88%, last week, the sixth straight weekly loss. For the month, gold is down 7.5%, amid mounting expectations the Fed will raise rates for the first time in nearly a decade at its mid-December meeting.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The dollar index rose to the highest level since April, amid growing expectations for tighter monetary policy in the U.S. in the coming months. Dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.
In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report for November, the last jobs report before the Fed decides on interest rates at its December 15-16 meeting.
Market players will also pay close attention to a speech by Fed Chair Janet Yellen on Wednesday and congressional testimony on Thursday.
The outcome of Thursday’s European Central Bank meeting will also be in focus amid speculation the central bank could ramp up its monetary stimulus program.
Meanwhile, silver futures for December delivery rose 7.2 cents, or 0.51%, to trade at $14.08 a troy ounce. Prices hit $13.85 last week, the weakest since August 2009.
Elsewhere in metals trading, copper edged higher on Monday, amid reports that Chinese metal producers are planning to cut production of the red metal to combat falling prices.
Copper is down almost 11% so far in November as expectations of higher interest rates in the U.S. and slower global economic growth, especially in China, weighed.