Investing.com - Gold prices trimmed gains on Monday to fall back below the $1,100-level after data showed that U.S. durable goods orders rose more than expected in June, while core orders also topped forecasts, boosting optimism over the health of the economy and supporting the case for a U.S. interest rate hike this year.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange hit a session peak of $1,104.90 a troy ounce, before paring gains to last trade at $1,091.30 during U.S. morning hours, up $5.40, or 0.5%.
The U.S. Commerce Department said that total durable goods orders, which include transportation items, increased by 3.4% last month, beating expectations for a gain of 3.0%.
Core durable goods orders, excluding volatile transportation items, inched up 0.8%, topping forecasts for an increase of 0.5%.
Orders for core capital goods, a key barometer of private-sector business investment, increased by 0.9% in June, above expectations for a 0.4%.
But shipments of core capital goods, a category used to calculate quarterly economic growth, declined 0.1%, disappointing forecasts for a 0.6% gain.
On Friday, gold plunged to $1,072.30, a level not seen since February 2010, before closing at $1,085.50, down $8.60, or 0.79%. Prices of the precious metal tumbled $44.80, or 4.08%, the fifth straight weekly loss.
Gold has been under heavy selling pressure in recent months amid speculation the Federal Reserve will raise interest rates for the first time in nine years as soon as September.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 96.72, down 0.63% for the day.
Investors awaited the outcome of the Federal Reserve's two-day monetary policy meeting due to begin on Tuesday to see if policymakers will give any indication on the timing of a rate lift-off.
Also on the Comex, silver futures for September delivery rose 7.2 cents, or 0.5%, to trade at $14.56 a troy ounce. Silver prices lost 34.2 cents, or 2.33%, last week, the fifth consecutive weekly decline.
Elsewhere in metals trading, copper for September delivery hit an intraday low of $2.351 a pound, a level not seen since June 2009, before trading at $2.352 during morning hours in New York, down 3.1 cents, or 1.29%.
The Shanghai Composite tumbled 8.5% on Monday, the biggest one-day drop since February 2007, on weak industrial profits and amid reports that government buying of stocks and securities has slowed.
Equity markets in China plunged sharply earlier this month, forcing policymakers to intervene and provide measures to boost liquidity and calm investors.
Copper prices lost 11.5 cents, or 4.57%, last week, the fourth consecutive weekly fall, as concerns over the health of China's economy weighed.
Data on Friday showed that manufacturing activity in China slowed to a 15-month low in July. The preliminary reading of the Caixin/Markit manufacturing purchasing managers’ index fell to 48.2 from a final reading of 49.4 in June.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.