MW: Gold falls on dollar, set for first weekly loss in five
By Moming Zhou, MarketWatch
NEW YORK (MarketWatch) -- Gold futures fell for a third straight session, heading for their first weekly loss in five, as investors ratcheted up selling in the face of a stronger U.S. dollar and easing inflation worries.
The dollar rose against its major rivals despite a worse-than-expected jobs report in the U.S. Tumbling crude prices, falling to the lowest level in nearly four years, also put downward pressures on gold, as lower oil prices reduce gold's appeal as a hedge against inflation.
Gold for February delivery, the most active contract, fell $17, or 2.2%, to $748.50 an ounce on the Comex division of the New York Mercantile Exchange. The contract is set to end the week down more than 8%, the first weekly loss since the week ended Nov. 7.
The December contract, which expires on Dec. 29, also moved lower. Open interest, or the number of outstanding contracts for December, stood at 1,637 as of Thursday, or 163,700 ounces, according to Comex data.
"There is little interest [in gold] reported from investors," wrote analysts at Action Economics. "As the decline in inflation continues, there will be less interest to use gold as a hedge, and this ultimately will dampen interest."
In currencies trading, the dollar index , which tracks the value of the greenback against other major currencies, rose 0.8%. A stronger dollar reduces gold's appeal as an investment alternative.
The dollar index briefly reduced its gains after the Labor Department reported U.S. nonfarm payrolls plunged by 533,000 in November, the worst job loss in 34 years. Economists had expected a loss of 350,000. See Economic Report.
Crude oil extended its declines after the gloomy jobs data. The front-month January contract fell by as much as 3.8% to $42 a barrel, the lowest since January 2005.
SPDR holdings fall
Holdings in the SPDR Gold Trust, the largest gold exchange-traded fund, fell for the first time in six sessions, down 0.23 tons to stand at 757.89 tons Thursday, according to the latest data from the fund.
The SPDR Gold Trust fell 2.4% to $73.71
In gold spot trading, the London gold-fixing price -- a benchmark for gold traded directly between big institutions -- stood at $771.75 an ounce Friday morning, down $1.50 from Thursday afternoon.
Gold inventories held by the Comex for futures delivery stood at 2,918,028 ounces as of Thursday, unchanged from a day ago, according to latest data from the exchange.
In other metals, March silver futures fell 3.1% to $9.225 an ounce, January platinum slid 0.8% to $792.50 an ounce, and March palladium fell 4.2% to $165 an ounce.
March copper dropped 6.2% to $1.379 a pound.
On the equities side, the Amex Gold Bugs Index , which tracks the share prices of major gold companies, tumbled 7% to 196.32.
The iShares Gold Trust exchange-traded fund fell 2.4% to $73.75, while the iShares Silver Trust ETF lost 2% to $9.19. The Market Vectors-Gold Miners ETF ) slumped 6.8% to $21.78.
