Gold climbed to its highest level in more than three months in early trading on Monday. Prices surged as traders continue to flock to the safety of the precious metal amid the ongoing economic crisis.
February gold traded at $903.00, up $7.20 on the session. Prices hit as high as $909.70 in electronic moves, taking out Friday's highs.
Gold's hedge appeal was boosted as the U.S. dollar gave back recent gains versus other majors. The greenback pulled back versus the sterling after hitting a 23-year high of 1.3501 on Friday. Monday morning, the dollar eased to 1.3800 amid speculation its recent gains were overdone.
The buck also turned lower versus the euro, easing to 1.3000 from a 2 1/2 year high of 1.2764.
On the economic front, the National Association of Business Economist's Industry Survey for January 2009 revealed the worst business conditions since the survey began in 1982, or at least 27 years. The disturbing data provides additional evidence that the recession which began in late 2007 has worsened significantly throughout the year.
Later in the morning, traders will check out data on U.S. new and existing home sales. Also this week, traders will keep an eye on the Federal Reserve meeting as well as reports on consumer confidence, durable goods orders, and fourth quarter GDP.
While the Federal Reserve has already lowered its target for the federal funds rate to a range of zero to 0.25 percent, traders will keep an eye on the statement released after the meeting for information on any additional steps being taken by the central bank.
In other trading, crude oil fell back below $46. Light sweet crude for March settlement traded at $45.57, down 90 cents on the day. Prices hit as low as $45.25.
