MW: Gold futures fall for second day as dollar rises
Gold futures fell Monday for a second straight session, as the U.S. dollar strengthened ahead of this week's meeting of leaders from the Group of 20 nations, reducing gold's appeal as an investment appeal.
Gold's losses came amid slumps in global stock markets after the Obama administration forced the resignation of General Motors Corp. CEO Rick Wagner and rejected restructuring plans offered by GM and Chrysler.
Gold for April delivery fell $9.90, or 1.1%, to $913.30 an ounce on the Comex division of the New York Mercantile Exchange. The contract ended last week's trading down 3.5%.
June gold, which holds the most open interest, or the number of outstanding total contracts, fell $9.8, or 1.1%, to $915.70 an ounce.
In currencies trading, the dollar rose against the euro and the British pound. A stronger greenback tends to push down dollar-denominated gold prices, though this pattern hasn't always held true in gold's recent trading.
Gold declined as "the metal resumed its traditional inverse relationship with the dollar while pockets of month-end book squaring emerged," said James Moore, a precious metals analyst at TheBullionDesk.com
The April contract has lost more than 3% so far this month. Prices are now more than $90 lower than this year's high above $1,000 an ounce hit on Feb. 20.
Despite the weakness in gold prices, demand for gold exchange-traded funds remained robust.
Gold holdings in SPDR Gold Shares , the biggest gold ETF, rose to a new record high of 1,127.44 tons Friday, up 2.45 tons from the previous day, according to the latest data from the fund.
Wagoner resigns
At a meeting on Friday in Washington, the Obama administration officials requested GM's Wagoner to resign, according to Wagoner's statement. Wagoner's departure is part of the restructuring agreement between GM and the U.S. government. See full story.
The news helped send stocks broadly lower in Asia and Europe and the dollar higher against its major rivals. U.S. futures also indicated a lower opening on Wall Street. Meanwhile, crude-oil futures lost more than 3%. See Currencies.
The dollar's gain also indicated that the G20 meeting won't produce an agreement on additional fiscal stimulus measures, analysts said.
"We remain bullish on the dollar and believe that aggressive U.S, policy actions taken so far will help the U.S. economy and the dollar outperform," wrote Marc Chandler, currency strategist at Brown Brothers Harriman.
A stronger dollar could continue adding downward pressures on gold prices this week, said TheBullionDesk's Moore.
In other metals trading Monday, silver for May delivery fell 1.7% to $13.035 an ounce, April platinum lost 0.5% to $1,121.90 an ounce, June palladium dropped 4.3% to $214 an ounce and May copper slid 3.7% to $1.768 a pound.
