Gold futures rose Monday for the first session in three, climbing nearly 2% to above $900 as the U.S. dollar weakened following an upbeat U.S. home sales report, boosting gold's investment appeal.
The greenback fell against most of its major rivals as investors opted for higher-yielding, riskier currencies after data showed the U.S. housing markets improved. Meanwhile, copper futures rose for a fourth straight session on continued declines in inventories.
June gold climbed $16.80, or 1.9%, to $905 an ounce on the Comex division of the New York Mercantile Exchange. The metal had lost 3.7% in April and nearly 3% last week.
"A lower dollar helped the yellow metal recover some lost value," said Jon Nadler, senior analyst at Kitco Metals Inc. Investors were also awaiting banks' stress-test results due out on Thursday, he added.
The U.S. pending home sales index rose 3.2% compared with February and was up 1.1% compared with a year earlier, the National Association of Realtors reported Monday.
The dollar fell after the home sales data, with the dollar index , which gauges the value of the greenback against a trade-weighted basket of six major rivals, was down 0.3% at 84.217. See Currencies.
The U.S. dollar softness and recent lower gold prices have helped Indian imports rebound to 20 tons in April, down only 4% from a year ago, according to Morgan Stanley analyst Hussein Allidina.
As economic recovery hopes continued, however, gold prices could face downward pressures as the metal's safe-haven appeal could be reduced, Allidina added.
The results of the government's Supervisory Capital Assessment Program -- otherwise known as the "stress test," are scheduled to be released on Thursday. The original release date was Monday.
Bank of America Corp. and Citigroup Inc. are working on plans to raise more than $10 billion each in capital after preliminary findings of the U.S. stress test on banks, according to media reports. See full story on banks' capital.
In other metals Monday, July silver rose 17.5 cents, or 1.4%, to $12.675 an ounce. June palladium gained $7.05, or 3.3%, to $220.95 an ounce, and July platinum added $21.60, or 2%, to $1118 an ounce.
Copper for July delivery rose 5 cents, or 2.4%, to $2.151 a pound
LME copper inventories fall
Copper inventories in London Metal Exchange fell below 400,000 tons Friday, down more than 100,000 tons, or 21%, from a month ago, according to the exchange's latest data.
Also helping copper move higher, China's Purchasing Manager's Index climbed for a second month to 53.5 in April, the Federation of Logistics and Purchasing reported Friday. A reading above 50 indicates growth. See full story on China Purchasing Managers' Index.
In other economic news, South Korea reported a 9% gain in export shipments in April from the previous month.
"Both China and South Korea have been adding to strategic reserves and restocking at what they consider to be much better prices," said Brent Cook, author of investment letter Exploration Insights.
Despite copper's recent rallies, its prices were still low compared with last year's high above $4 a pound.
China's State Reserves Bureau is believed to have bought more than 300,000 tons of copper since March, and more LME copper inventories are expected to be bought by China in the next few months.
