(RTTNews) - Gold futures rallied to settle higher for a second straight day on Monday, after reports of a bailout plan for Spanish banks. Nevertheless, investors appeared unsettled on eurozone contagion fears as the bailout plans for Spain did not provide enough clarity. Gold prices took a pounding last week after the U.S. Federal Reserve failed to give any clear indication of monetary stimulus for the economy.
Spain on Saturday said it would seek financial assistance of about 100 billion euros from the European Union to help bailout its banking sector. Spain's banking was severely impacted due to bad loans after the housing market collapsed.
Gold for August delivery, the most actively traded contract, gained $5.40 or 0.3 percent to close at $1,596.80 an ounce Monday on the Comex division of the New York Mercantile Exchange.
Gold traded at an intraday high of $1,609.30 an ounce and a low of $1,582.70 an ounce.
Gold gold shed nearly 2 percent last week after the Federal Reserve did not provide ample cue if any quantitative easing was forthcoming.
The dollar index, which tracks the U.S. unit against six major currencies, was trading at 82.457 on Monday, up from 82.439 in North American trade late Friday. The dollar scaled a high of 82.58 intraday and a low of 81.79.
The euro traded lower against the dollar at $1.2505 on Monday, as compared to $1.2512 late Friday. The euro scaled a high of $1.266 intraday and a low of 1.2484.
In economic news, the Organization for Economic Cooperation and Development data indicated an improvement in April. The composite leading indicator, designed to anticipate turning points in economic activity relative to trend, rose to 100.5 in April from 100.4 in March. However, when compared to April last year, the index dropped 0.47 percent.
Activity in the eurozone continued to be below its long-term trend, and the corresponding indicator remaining unchanged at 99.6 for the third consecutive month.
The sub-indicator for the United States remained stable at 101.2 during the month, indicating improving economic activity. The index for the United Kingdom signaled activity remained slightly below the long-term trend, as was the case with Canada and Germany.
