Gold Ends Lower As Dollar Continues To Strengthen

(RTTNews) - Gold futures ended lower on Monday, tracking rising equity markets with the dollar trending higher against a select band of currencies. There was little or no significant economic releases for cues, with investors upbeat over an improving U.S. economy.

Nevertheless, trading volumes are expected to remain thin during the week, ahead of the New Year.

After some strong data recently, including a report showing U.S. gross domestic product to have grown much more than expected in the third quarter, the prospects of a rate hike next year seem to get more definite with the greenback continuing to gain consistently against most major currencies. A higher interest rate supports the dollar and is a drag on gold.

Greece was once again pushed into a political crisis on Monday after the parliament failed to elect presidential candidate, Stavros Dimas, paving the way for a snap general election early 2015. Prime Minister Antonis Samaras' candidate, Dimas - a former European Commissioner and the only candidate in the fray, was rejected by a vote of 162 in favor and 132 against, but woefully short of the required 180 votes in the 300 member house.

This could mean a snap general election for the economically beleaguered country, which analysts feel could go in favor of the leftist Syriza party that is extremely opposed to the austerity measures suggested by the European Union and the International Monetary Fund.

Gold for February delivery, the most actively traded contract, dropped $13.40 or about 1.1 percent to settle at $1,181.90 an ounce on the Comex division of the New York Mercantile Exchange on Monday.

Gold for February delivery scaled an intraday high of $1,197.50 and a low of $1,178.60 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged lower to 712.30 tons on Monday, from its previous close of 712.90 tons .

The dollar index, which tracks the U.S. unit against six major currencies, traded at 90.20 on Monday, up from its previous close of 90.05 late Friday in North American trade. The dollar scaled a high of 90.22 intraday and a low of 89.79.

The euro trended lower against the dollar at $1.2157 on Monday, as compared to its previous close of $1.2181 late Friday in North American trade. The euro scaled a high of $1.2220 intraday and a low of $1.2144.

In economic news, Switzerland's consumption indicator dropped slightly in November as fewer car sales weighed on spending, data from UBS showed Monday. The Swiss consumption index dropped to 1.29 in November from 1.32 in October. Although weak car sales were a drag on consumption, Christmas retail business has apparently made a good start.

Among data due this week are the consumer confidence index for December from the Conference Board, the weekly jobless claims, the National Association of Realtors' pending home sales index for November and the results of the Institute for Supply Management's national and MNI Indicators' regional manufacturing surveys.

The S&P Case-Shiller house price index for October, Markit's final U.S. manufacturing index for December and the Commerce Department's construction spending data for November will also be out during the course of the week.