Gold eases but remains near six-month high, eyes Fed

Monday Monday (Photo credit: soonerpa)

Gold eased on Monday as investors took profits, but the metal stayed near a six-month high after last week's disappointing U.S. payrolls data boosted hopes that the Federal Reserve could unveil new stimulus as early as Thursday.

Palladium rose nearly 3 percent on better demand expectation after encouraging Chinese vehicle sales data.

Weak Chinese trade data prompted some bullion selling following three consecutive weeks of sharp gains, gains that were accelerated by the European Central Bank's bond-buying program last week and by hopes for Fed action to stimulate the U.S. economy at its two-day policy meeting to conclude on Thursday.

Investment in gold-backed exchange-traded products (ETPs) reached a record high last week, while some investors took profits after the U.S. Commodity Futures Trading Commission on Friday showed holdings of U.S. gold futures by speculators rose to their highest in a year.

"We could see a pullback in gold at anytime as prices are fairly overbought on a daily basis, and once we hit the $1,800 an ounce level, we think there could be a multi-week congestion," said Mark Arbeter, chief technical strategist at S&P Capital IQ.. ... Continue to read.

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