Gold futures settled lower on Monday although the downside was just marginal due to the dollar’s weakness.
A drop in long-term treasury yields amid worries about growth due to rising delta variant of the coronavirus pushed up the demand for the yellow metal.
Traders were largely making cautious moves as they awaited the Federal Reserve’s two-day monetary policy meeting which begins on Tuesday.
The central bank will announce its monetary policy on Wednesday. The Fed is expected to leave interest rates unchanged, but traders will be paying close attention to any comments regarding the bank’s asset purchase program.
The dollar index dropped to 92.53 before recovering a bit to 92.62, still staying notably lower than its previous close of 92.91.
Gold futures for August ended down by $2.60 or about 0.1% at $1,799.20 an ounce, the lowest settlement since July 6.
Silver futures for September closed up by $0.85 or about 0.3% at $25.318 an ounce, while Copper futures for September settled at $4.5850 per pound, gaining $0.1850 or 4.2%.
A survey showed German business confidence weakened unexpectedly in July as managers’ optimism was clouded by problems with the supply of raw materials and other products and by an upturn in coronavirus infections.
U.S.-China tensions intensified after Chinese Vice Foreign Minister Xie Feng said that the relationship between the world’s two largest economies “is now in a stalemate and faces serious difficulties.”
In U.S. economic news, a report from the Commerce Department showed an unexpected steep drop in new home sales in the month of June.
The report said new home sales tumbled by 6.6% to an annual rate of 676,000 in June after plunging by 7.8% to a revised rate of 724,000 in May.
Economists had expected new home sales to jump by 4% to an annual rate of 800,000 from the 769,000 originally reported for the previous month. With the unexpected decrease, new home sales slumped to their lowest annual rate since hitting 582,000 in April of last year.