Investing.com -- Gold futures inched down on Monday amid a relatively flat dollar, as a wave of disappointing economic indicators exacerbated fears of a global recession.
The poor readings come in the wake of a downbeat U.S. national employment report on Friday, which bolstered dovish sentiments for a delayed interest rate hike by the Federal Reserve.
On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a broad range between $1,129.60 and $1,141.60 an ounce, before settling at $1,134.30, down 2.30 or 0.20% on the session. On Friday, gold futures surged by more than 2% above $1,140 an ounce, enjoying their strongest one-day move in more than a month. Over the last 30 days of trading, the precious metal has gained approximately 1.45% in value.
Gold likely gained support at $1,129.60, the low from October 2 and was met with resistance at $1,155.90, the high from Sept. 29.
The dollar only experienced minor fluctuations on Monday in spite of a plethora of downtrodden data which painted a bleak outlook of the U.S. economy, as the Fed weighs whether to raise short-term interest rates for the first time in nearly a decade.
The Institute of Supply Management reported on Monday morning that its non-manufacturing purchasing index dipped to 56.9 in September from a level of 59.0 the previous month. It also fell below consensus estimates of a 58.0 reading. Following two consecutive months of stellar reports over the summer, the September report was dragged down by weakness in business activity and new orders. In July, the index surged to a 59.6 level, its strongest reading in 18 years.
Separately, there are signs that growth in the services sector is decelerating after the Services Purchasing Managers' Index fell to 55.1 last month, below consensus expectations of a 55.8 reading. Within the report, there were signs of weakness in growth in new orders and production overall. In addition, the daily spending habits of Americans were virtually unchanged last month according to Gallup's U.S. Consumer Spending Measure for September. During the month, American consumers averaged about $88 per day, just below an $89 average in August.
On Friday morning, the U.S. Department of Labor's Bureau of Labor Statistics said non-farm payrolls for the month of September increased by 142,000, significantly below consensus estimates from analysts of a 203,000 gain. The figure also fell well below low end of estimates of a 180,000 increase. The unemployment rate remained steady at 5.1%, while the labor participation rate declined by 0.2% to 62.4%.
The subdued data dampened optimism for an imminent rate hike by the Fed over the next several months. Following the Federal Open Market Committee's September meeting, Fed chair Janet Yellen sent strong indications that the U.S. central bank could raise short-term rates by the end of the year if the economy and labor market continued to show improvement.
An interest rate hike is viewed as bearish for gold, which struggles to compete with high-yield bearing assets in rising rate environments.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, stood at 96.26 in U.S. afternoon trading, up 0.22% on the session. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for December delivery rose 0.362 or 2.37% to 15.625 an ounce.
Copper for December delivery gained 0.031 or 1.33% to 2.356 a pound.