Gold Ends Higher Ahead Of Fed Meet

(RTTNews) - Gold futures ended higher on Monday, as investors await the decision of the Federal Reserve on interest rate hikes, with many speculating an immediate hike by the Fed at the conclusion of its policy meet on Thursday. Markets are under pressure with the two-day Federal Open Market Committee meet scheduled to start tomorrow. The Fed will announce its policy decision Thursday afternoon, with analysts divided whether the central bank will raise interest rates. If a hike is indicated, then it would be the first since 2006.

The uncertainty of a rate continues to roil markets after some mixed economic data in the last few weeks. Many analysts believe the Fed would likely refrain from an immediate hike considering the health of the global economy.

Gold for December delivery, the most actively traded contract, gained $4.40 or 0.4 percent, to settle at $1,107.70 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.

Gold for December delivery scaled an intraday high of $1, 109.80 and a low of $1, 102.60 an ounce.

On Friday, gold prices for December delivery dropped $6.00 or 0.5 percent, to settle at $1,103.30 an ounce, after some better than expected inflation data lifted the prospects of an immediate rate hike at the Federal Reserve's Federal Open Market Committee meet next week. Gold prices dropped about 1.6 percent last week.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved up to 678.18 tons from its previous close of 672.18 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.27 on Monday, up from its previous close of 95.11 in late North American trade on Friday. The dollar scaled a high of 95.45 intraday and a low of 94.91.

The euro trended lower against the dollar at 1.1312 on Monday, as compared to its previous close of 1.1338 in North American trade late Friday. The euro scaled a high of 1.1374 intraday and a low of 1.1285.

On the economic front, China's industrial production increased at a slower-than-expected pace in August, while retail sales growth exceeded expectations, figures from the National Bureau of Statistics showed Monday.

Industrial production climbed 6.1 percent year-over-year in August, slightly faster than previous month's 6.0 percent rise. Economists had expected a 6.3 percent growth for the month.

Retail sales growth improved to 10.8 percent annually in August from 10.5 percent in July. The expected rate of increase was 10.6 percent.

Eurozone industrial production rose for the first time in three months and exceeded economists' expectations, suggesting that a positive contribution to growth is likely in the third quarter.

Industrial production rose 0.6 percent month-on-month following a 0.3 percent slump in June, which was revised from a 0.4 percent fall. Economists had expected a 0.3 percent gain. The growth was also the biggest since February, when production rose 0.9 percent.