Gold Ends Higher On China Data

(RTTNews) - Gold futures ended modestly higher Monday, ahead of the U.S. Federal Reserve Chairman Ben Bernanke's testimony before U.S. lawmakers later this week and on China's second quarter gross domestic product data which was in line with expectations. The Fed's assurance of an extended period of monetary stimulus last week also helped gold prices perk up, with the program now expected to begin tapering some time next year. Increased physical demand for the metal was also another catalyst for gold.

China's gross domestic product expanded 7.5 percent on year in the second quarter of 2013, according to a government release on Monday. This was in line with forecast, although lower than the 7.7 percent recorded in the previous quarter. On a quarterly basis, China GDP added 1.7 percent, just short of the 1.8 percent expectations but up from 1.6 percent in first quarter.

Gold for August delivery, the most actively traded contract, gained $5.90 or 0.5 percent to close at $1,283.50 an ounce Monday on the Comex division of the New York Mercantile Exchange.

Gold for August delivery scaled an intraday high of $1,293.60 and a low of $1,272.50 an ounce.

Last week gold surged over 5 percent to settle at a near three-week high, with the dollar weakening against some major currencies after the U.S. Federal Reserve indicated it would continue to maintain its quantitative easing policy.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 939.07 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 83.08 on Monday, up from 82.94 late Thursday in North American trade. The dollar scaled a high of 83.46 intraday and a low of 82.88.

The euro traded lower against the dollar at $1.3061 on Monday, as compared to $1.3074 late Friday in North America. The euro scaled a high of $1.3081 intraday and a low of $1.2994.

In economic news, the U.S. Commerce Department said retail sales increased by 0.4 percent in June compared to a downwardly revised 0.5 percent increase in May. Economists had been expecting retail sales to jump by 0.8 percent compared to the 0.6 percent growth originally reported for the previous month. Excluding a notable increase in auto sales, retail sales came in unchanged in June versus economist estimates for a 0.5 percent increase.

Meanwhile, the Federal Reserve Bank of New York said its general business conditions index rose to 9.5 in July from 7.8 in June, with a positive reading indicating an increase in regional manufacturing activity. The increase surprised economists, who had been expecting the index to drop to 5.0.

Business inventories in the U.S. unexpectedly increased in May, a report from the Commerce Department showed Monday. Business inventories inched up by 0.1 percent in May following a downwardly revised 0.2 percent increase in April. Economists expected inventories to come in unchanged compared to the 0.3 percent increase originally reported for the previous month. The increase was attributed primarily to a 0.6 percent increase in retail inventories.

From the eurozone, the number of employees in the German manufacturing sector increased modestly in May, preliminary data released by the Federal Statistical Office showed. The number of persons employed in manufacturing units with 50 or more employees, increased 0.6 percent on an annual basis to 5.2 million in May.

Chinese industrial production was up 8.9 percent on year in June, but short of the 9.1 percent forecast and down from 9.2 percent in May. Meanwhile, retail sales in China jumped an annual 13.3 percent, which is ahead of the expectations for a 12.9 percent increase.

Last week, China's Finance Minister Lou Jiwei said in Washington that the country's economic growth may slow further to 7 percent this year, but believes there will not be a hard landing.