Investing.com - Gold futures rose on Monday due to safe-haven demand from investors worried over chaos erupting in Iraq, though upbeat U.S. indicators watered down gains by reminding investors that monetary stimulus tools in the U.S. are on their way out.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,274.60 a troy ounce during U.S. trading, up 0.04%, up from a session low of $1,272.60 and off a high of $1,285.10.
The August contract settled up 0.01% at $1,274.10 on Friday.
Futures were likely to find support at $1,250.10 a troy ounce, Tuesday''s low, and resistance at $1,294.70, the high from May 27.
Concerns over the ongoing Sunni insurgency in Iraq continued to weigh on the dollar Monday by stoking fears that escalating conflict could dampen global recovery, especially if the conflict disrupts Iraqi oil exports, hikes prices at U.S. gasoline pumps and waters down the economy.
Geopolitical concerns boosted gold, as the yellow metal tends to trade inversely from the dollar, while news that the International Monetary Fund trimmed its 2014 U.S. economic growth forecast due to a harsh winter and “still-struggling housing market” supported the precious metal as well.
The IMF said it now expects the U.S. economy to expand 2% in 2014, down from its forecast of 2.8% in April.
Positive U.S. data, meanwhile, capped gold''s gains, as the numbers solidified market expectations for the Federal Reserve to wind down its monthly bond-buying program possibly this year.
The Federal Reserve Bank of New York reported earlier that its general business conditions index increased to 19.28 this month from 19.01 in May. Analysts had expected the index to decline to 15.0.
A separate report showed that U.S. industrial production rose by 0.6% last month, beating forecasts for a 0.5% gain.
Past and current Fed asset-purchasing programs have supported gold since the 2008 financial crisis by suppressing interest rates, which boosts gold''s appeal as a hedge to a weaker dollar.
Meanwhile, silver for July delivery was down 0.01% at $19.653 a troy ounce, while copper futures for July delivery were up 0.59% at $3.048 a pound.
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