Gold prices eased on Monday as broad economic stimulus measures in China, the biggest bullion consumer, failed to invoke investor confidence and a U.S. dollar rally to two-month highs capped upside momentum.
Spot gold fell 0.2% to $2,650 per ounce, having hit its highest in over a week earlier in the session. U.S. gold futures eased 0.3% to$2,667.50.
The dollar rose to its highest since mid-August as investors digested China's weekend stimulus announcements, while the euro extended its fall ahead of a central bank meeting this week.
Phillip Streible, chief market strategist at Blue Line Futures, said there were "a lot of little headwinds for gold," including the China stimulus, stronger dollar, weaker Euro, weaker base metals, and profit-taking.
Gold's record price rally in the last few months has dampened investor sentiment and bullion demand in China. A stronger dollar makes gold more expensive for other currency holders.
Chinese data is double-edged. Weak Chinese data could reduce demand for gold, but a broader slowdown in China could unsettle markets, enhancing gold's appeal as a safe haven, Zain Vawda, market analyst at MarketPulse by OANDA, said.
Source : Reuters
