Gold, silver futures settle higher

Activity in the NY manufacturing sector grew at a notably slower pace in the month of July, according to a report released by the Federal Reserve Bank of NY on Monday. August gold rose $6.20, or 0.5%, to settle at $1,233.70 an ounce.

The New York Fed said its general business conditions index dropped to 9.8 in July from '19.8 in June, although a positive reading still indicates growth.

Official statistics also showed that the consumer price index, or cost of living, was unchanged in June.

Gold is looking to build on its first weekly rise since early June, after gaining early Monday, as recent economic data raised speculation that the Federal Reserve might not be able to raise interest rates to the suspected degree the panel had thought.

"The longer rates stay near zero, the more crucial to market sentiment central banks become", Adrian Ash, head of research at BullionVault stated. As a result, the gold futures edged higher for the second consecutive session. The moderate rise in stocks could hardly curb the upward move of gold futures.

Silver futures gained 0.166 dollar or 1.04 percent to close at USD 16.07 per troy ounce at the COMEX. Palladium added 0.6pc to $862.80 per ounce.