The price of gold continued to recover from its three-year low Monday morning, with the US dollar trading mixed ahead of this week's economic data.
In news bearish to gold, Barclays has lowered its gold price forecast for 2013 citing a weak second quarter, a recent sell-off and lack of investment buying. The bank expects an average gold price at $1,393 an ounce in 2013 down from the earlier forecast of $1,483 an ounce.
Gold for August delivery, the most actively traded contract, moved up $17.10 to $1,240.80 an ounce. Last week, gold lost over 5 percent to end at a near three-year low after a slew of recent upbeat macroeconomic data stoked fears the Federal Reserve would slash its quantitative easing program very soon. Investors also weighed the outlook provided by some analysts, lowering their gold price forecast earlier this week.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 969.50 tons.
Meanwhile, the U.S. dollar was leveling off from its one-month high versus the euro, while hovering around its one-month high against sterling and the Swiss franc. The buck was ticking higher versus the yen.
In economic news from the euro zone, Germany's manufacturing sector contracted for the fourth straight month in June, and at a slightly faster rate than previously estimated, final data from a survey by Markit Economics and BME showed. The seasonally adjusted manufacturing purchasing managers' index dropped to 48.6 in June from 49.4 in May. The score was a tad lower than 48.7 estimated earlier..
Meanwhile, an indicator euro zone's manufacturing sector performance increased more than previously estimated in June, detailed results of a survey by Markit Economics revealed. The headline purchasing managers' index rose to a 16-month high of 48.8 in June from 48.3 in May. The latest score was slightly above the flash score of 48.7.
Annual inflation in the euro area accelerated in June as expected by economists, latest data showed. Inflation as per the harmonized index of consumer prices advanced to 1.6 percent in June from 1.4 percent in May and 1.2 percent in April, flash estimates released by statistical office Eurostat revealed. The outcome matched economists' forecast.
Unemployment rate in euro zone increased to 12.1 percent in May from a downwardly revised 12 percent in April, the latest data from Eurostat revealed. The initially reported jobless rate for April was 12.2 percent, a record high. Economists had forecast a further increase in the rate to 12.3 percent in May.
Elsewhere, the prices of silver and platinum were trading higher in morning deals.
From the U.S., the Institute for Supply Management is scheduled to release the results of its manufacturing survey for June at 10 am ET. Economists expect the manufacturing index to move into the expansion territory to 50.5 from 49 in May.
Simultaneously, the Commerce Department will release its construction spending report for May. The consensus estimates call for a 0.6 percent month-over-month increase in construction spending for May following a 0.4 percent increase in April.
