MW: Gold falls for second day on rising dollar, weaker oil
NEW YORK (MarketWatch) - Gold futures fell for a second day Friday as the U.S. dollar strengthened and crude oil tumbled, reducing the metal's appeal as an alternative investment and as a hedge against inflation.
Gold for February delivery was last down $22.60, or 2.6%, at $838 an ounce on the Comex division of the New York Mercantile Exchange. Despite the loss, gold is set to end the week up 2.3%.
"Trading should get increasingly quiet over the course of the day and into next week in advance of the upcoming holidays, but rallies will remain vulnerable," said Edward Meir, a metals analyst at MF Global.
The nearby December contract, which expires on Dec. 29, also dropped. Open interest, or the number of outstanding contracts of the December contract, stood at 441 as of Thursday, or 44,100 ounces, according to Comex data.
Gold inventories held by the Comex for futures delivery stood at 2,832,983 ounces as of Thursday, unchanged from a day ago, according to the latest data from the exchange.
On currencies trading, the dollar was up against most major counterparts Thursday, jumping against the euro after the European Central Bank cut its deposit rate and lifted lending rates in the wake of the U.S. Federal Reserve's easing earlier this week. See Currencies.
The greenback and the dollar-denominated gold prices often move in the opposite direction.
Also adding downward pressures on gold was falling crude prices. The January futures contract, which expires Friday, tumbled more than 7% to as low as $33.44 a barrel. The more active February contract, however, moved up 0.3% to $41.81.
In gold spot trading, the London afternoon gold-fixing price -- a benchmark for gold traded directly between big institutions -- stood at $839 an ounce Friday morning, down $16.25 from Thursday afternoon.
Holdings in the SPDR Gold Trust, the largest gold exchange-traded fund, stood at 775.33 tons on Thursday, unchanged from a day ago and up 26 tons from a month ago, according to the latest data from the fund.
In other metals, March silver futures lost 2.8% to $10.81 an ounce. January platinum slid 1.6% to $850.10 an ounce and March palladium fell 0.3% to $178 an ounce.
March copper rose 1.3% to $1.319 a pound.
