[Au Price] Gold Firmer on Short Covering, Bargain Hunting and Safe-Haven Demand

By  Paul Ploumis 28 Jul 2015  Last updated at  04:15:58 GMT

(Kitco News) - Gold prices ended the U.S. day session moderately higher Monday, lifted on some safe-haven demand, short covering and bargain hunting. A solidly lower U.S. dollar index Monday also worked in favor of the precious metals bulls. August Comex gold was last up $9.90 at $1,095.40 an ounce. September Comex silver was last up $0.112 at $14.60 an ounce.

World stock markets were under selling pressure and gold benefitted following a sharp sell-off in the Chinese stock market Monday. The China stock market saw the biggest one-day drop in eight years, as the Shanghai composite index was down 8.5% Monday. The selling pressure in China is coming amid concerns the Chinese government will not continue its recent efforts to prop up Chinese share prices, including forcing sellers to the sidelines and limiting trading in some shares. China has the world’s second-largest economy and is the world’s largest raw commodity importer. If the Chinese markets continue to be significantly unsettled then it is likely gold would continue to see at least some safe-haven investment demand.

Crude oil prices hit another four-month low Monday, partly on the China worries and amid a glut of oil on the world market. The other “outside market” saw the U.S. dollar index solidly lower on the day. The Euro currency was higher following an upbeat economic report coming out of Germany Monday.

Traders are looking forward to this week’s Federal Open Market Committee (FOMC) meeting, which begins Tuesday morning and ends with a statement Wednesday afternoon. As has been the case for the past several meetings, traders and investors will parse the statement, seeking clues on the precise timing of the Fed’s looming interest rate rise.

The London P.M. gold fix is $1,100.00 versus the previous A.M. fix of $1,098.60.

Courtesy: Kitco News