MW: Gold loses 1%, eating into previous session's gains
By Moming Zhou, MarketWatch
NEW YORK (MarketWatch) -- Gold futures traded lower Monday, largely mirroring weakness in crude oil and other commodities, after the metal jumped the most in nearly two months at the end of last week.
Gold for December delivery was last down $7.50, or 1%, at $735 an ounce on the Comex division of the New York Mercantile Exchange. It jumped 5.3% on Friday, the biggest one-day percentage gain for the benchmark gold contract since Sept. 18.
While calling Friday's rebound "encouraging," TheBullionDesk.com analyst said James Moore pointed to "some sizable overhead resistance to conquer, with another failed attempt to clear $765 leaving the metal vulnerable to a deeper rout, potentially back to $650."
December gold ended last week's trading at $742.50, up 1.1%, gaining for a second consecutive week.
Gold's loss followed broadly declines in commodities Monday, with the crude-oil futures down a further 1.4%. The Reuters/Jefferies CRB Index , a benchmark gauging the prices of major commodities, lost 0.7%.
As for early trading in the other major metals, December copper fell 4.5% to $1.6310 a pound. December silver sank 2% to $9.305 an ounce, January platinum skidded 3.3% to $817.60 an ounce and December palladium lost 0.6% to $215.35 an ounce.
In gold spot trading, the London gold-fixing price -- used as a benchmark for gold for immediate delivery -- stood at $745 an ounce Monday morning local time, down $2.50 from Friday afternoon.
Gold in the SPDR Gold Trust , the largest gold exchange-traded fund, remained at 748.94 tons on Friday, unchanged for a third day, according to the latest data from the fund. Gold held by the fund hit a record high of 770.64 tons on Oct. 10.
Despite gold's recent weakness, down more than 25% from its record high above $1,000 hit in March, it's "still doing an admirable job" in terms of wealth preservation, said Mark O'Byrne, executive director at Gold & Silver Investments.
The metal's up 10% from its low in August 2007, when the financial crisis started. In contrast, the S&P 500 equities benchmark has slumped about 40%.
Economic worries at center stage
Some analysts saw gold prices rise further as more economic data have indicated that major world economies are sliding into recession.
The U.S. is in for a "prolonged" recession dragging into 2009, according to a survey by the National Association for Business Economics. The organization saw a contraction in inflation-adjusted gross domestic product of 2.6% in the cards for the fourth quarter, with the weakness carrying well into next year. See Economic Report.
Meanwhile, Japan's economy shrank in the third quarter, marking its second straight quarterly contraction and sending the nation into its first recession since 2001. And the Confederation of British Industry revised lower its U.K. economic forecast earlier Monday.
Facing what's widely expected to be the sharpest global downturn in decades, leaders of the world's 20 largest economies launched frantic efforts Saturday to restore shattered confidence and shore up their economies.
