Gold Climbs as Dollar Slips (Update 1)

Gold prices follow a tough holiday week by climbing on Monday as the U.S. dollar slips against a basket of foreign currencies.
By Joe Deaux ,

Updated from 11:55 a.m. ET with settlement prices

NEW YORK (

TheStreet

) --

Gold prices

climbed Monday on a slight reprieve from

Friday's drop

and as the U.S. dollar slipped.

Gold for August delivery at the COMEX division of the New York Mercantile Exchange jumped $22.20 to settle at $1,234 an ounce. The

gold price

traded as high as $1,237.40 and as low as $1,214.40 an ounce, while the spot price was tacking on $13.72.

"I don't really expect that significant of a move, especially after Friday's fallout," Phil Streible, senior commodities broker at RJO Futures,

said in an interview

. "I anticipate that we'll move back down, fish out the stops."

Gold dropped 0.9% last week as a raft of positive economic data raised concerns among traders that the

Federal Reserve

may begin to taper its monetary stimulus program as early as September.

The yellow metal came under particular selling pressure on Friday as the Bureau of Labor Statistics reported better-than-expected headline nonfarm payrolls increased 195,000 in June, while the unemployment rate remained unchanged at 7.6%. A deeper look into the report showed an upward revision of payrolls added in May to 195,000 jobs and 199,000 in April.

"The unemployment rate remained at 7.6%, and our economists maintain their 'Septaper' view that the Fed will begin to reduce the pace of its asset purchases at the September meeting,"

Barclays

wrote in a research note on Monday.

Silver prices

for September delivery rose 30 cents to $19.04, while the

U.S. dollar index

was falling 0.26% to $84.23.

Barclays also noted that physical demand, in the wake of recent selling, has remained subdued as compared to April when gold witnessed its biggest percentage two-day selloff in some 30 years.

The slide in physical demand -- which traditionally is highest in the Indian and Chinese markets -- likely could be due to a seasonal lull. Traders and analysts typically look to the fall season for an uptick in physical buying in Asian markets.

The U.S. Mint reported that July sales of one-ounce American Buffalo and American Eagle gold coins has reached 20,500.

Gold mining stocks were mixed on Monday. Shares of

Gold Fields

(GFI) - Get Report

were falling 2.6%, while shares of

Agnico-Eagle Mines

(AEM) - Get Report

were gaining 5.4%.

Among volume leaders,

Barrick Gold

(ABX)

was adding 1.1%.

Gold ETF

SPDR Gold Trust

(GLD) - Get Report

was increasing 1.3% to $119.62 a share, while

iShares Gold Trust

(IAU) - Get Report

was up 1.3% to $12.03 a share.

Exchange traded fund outflows continue to dampen paper market price performance as gold ETF holdings dropped 680,000 ounces to about 70 million ounces, which is the lowest level seen since August 2010, according to data collected by

UBS

.

-- Written by Joe Deaux in New York.

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