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Gold ends higher as dollar, stocks fall

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Gold edged up from the previous session's three-week low on Monday, as European equities were hurt by soft Chinese trade data and worries about Greece, though a steady dollar capped the upside.

U.S. gold futures settled $6.90 higher at $1,241.50 an ounce.

Spot gold gained 0.7 percent to $1,239.56 an ounce. The metal on Friday posted its biggest one-day loss since December 2013, hitting $1,228.25, as the dollar rallied after strong U.S. payrolls data.

``For the three months up to the FOMC meeting gold has behaved as a safe haven because of Greece, but now the focus has shifted back to the U.S. and the timing of the U.S. interest rates hike,'' Citi analyst David Wilson said, referring to last month's interest-rate policy meeting of the Federal Open Market Committee.

``We are seeing gold lower in the second quarter as the market does not seem really concerned about the impact of Greece on the rest of Europe at the moment.''

Gold was also helped as European shares tracked losses on Wall Street and in Asia, with disappointing Chinese trade datafurther raising concerns about growth in the world's second-biggest economy.

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The dollar was steady, giving back just some of its gains made on Friday, after data showed U.S. jobs growth rose solidly in January and wages rebounded, an indication of economic strength that put a mid-year interest rate increase from the Federal Reserve back on the table.

The U.S. central bank has held benchmark borrowing costs near zero since December 2008. An increase in rates should further boost the dollar, in turn denting demand for gold, a non-interest-bearing asset.

Investors were monitoring news from Greece after the new government reaffirmed its rejection of an international bailout program.

Hedge funds and money managers cut their bullish bets on gold and silver futures and options for the first time in six weeks during the week to Feb. 3, U.S. Commodity Futures Trading Commission data showed on Friday.

In physical markets, Chinese premiums rose to between $4 and $5 an ounce, from less than $4 in the previous session, as last week's sharp decline in prices attracted some buyers.

Chinese consumers typically buy gold for gift-giving ahead of the Lunar New Year holiday on Feb. 19 to 20, but buying is likely to slow during and just before the break, traders said.