Gold futures snapped a three-day losing streak and settled higher on Monday, as a sell-off in global stock markets amid worries about the potential collapse of leading Chinese property developer Evergrande prompted traders to seek the safe-haven commodity.
A slightly positive dollar limited gold’s uptick. The dollar found some support with traders eyeing the Federal Reserve’s monetary policy announcement, due on Wednesday. The Fed is widely expected to leave monetary policy unchanged but could address the outlook for its asset purchase program.
The minutes of the Fed’s last meeting signaled the central bank was prepared to begin scaling back asset purchases by the end of the year.
The dollar index, which climbed to 93.45 in the Asian session, pared some gains and dropped to 93.25 by mid afternoon, up just marginally from the previous close.
Gold futures for December ended up by $12.40 or about 0.7% at $1,763.80 an ounce, closing higher for the first time since last Tuesday.
Silver futures for December ended lower by $0.133 at $22.204 an ounce, while Copper futures for December settled at $4.1145 per pound, down $0.1315 from the previous close.
China’s property giant Evergrande, the world’s most indebted property developer with more than 300 billion dollars of liabilities, has to pay interests on its bonds with a payment deadline due on Thursday. The company has warned more than once that it could default.
Investors await the outcome of the Federal Reserve’s two-day meeting starting on Tuesday for more clues about the withdrawal of the QE program.
The Bank of Japan, the Bank of England and the Swiss National Bank are also scheduled to hold monetary policy meetings this week.
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