MW: Gold falls to one-month low as oil drops, dollar strengthens
NEW YORK (MarketWatch) -- Gold futures fell Monday to the lowest level in one month, as falling oil prices and a stronger U.S. dollar reduced the precious metal's appeal as a hedge against inflation and a weaker currency.
Crude oil fell below $68 a barrel Monday, the weakest in nearly two weeks, after the World Bank predicted that the global economy will shrink 2.9% this year, a steeper fall than the 1.7% contraction it predicted in March.
On the Comex division of the New York Mercantile Exchange, August gold fell $12.70, or 1.4%, to $923.50 an ounce. The June contract fell as low as $921.10, the weakest level since May 19.
The metal ended last week's trading down for a third straight week, the longest weekly losing streak in two months.
"Uncertainty brings out fund sellers looking at lower crude," said George Gero, a precious-metals trader for RBC Capital Markets. "Next support area could be $915 with resistance at 950 again."
In currencies, the dollar and the Japanese yen advanced against the euro after the World Bank's new prediction encouraged buying for lower-risk currencies. The euro was down 0.8% at $1.3831, while the dollar index (DXY 80.84, +0.58, +0.72%) was up at 80.859. See Currencies.
In gold exchange-traded funds, holdings in SPDR Gold Trust (GLD 90.40, -1.50, -1.63%) , the biggest gold ETF, stood at 1,132.15 metric tons Friday, remaining unchanged for an 11th day.
"We still see gold at the most risk to test lower as physical demand remains slack and institutional investment demand stagnant," said James Moore, a precious-metals analyst at TheBullionDesk.com, in a note.
In other metals, July platinum fell $19.50, or 1.6%, to $1,191.70 an ounce, while September palladium lost $4.65, or 1.9%, to $241.50 an ounce. July silver sank 40 cents, or 2.8%, to $13.80 an ounce.
Holdings in the iShare Silver Trust (SLV 13.62, -0.37, -2.65%) , the largest silver ETF, stood at 8,724.86 metric tons Friday, unchanged for a fourth session.
The July copper contract lost 6.85 cents, or 3%, to $2.182 a pound.
London inventories fell to 280,350 metric tons Friday, down 1,250 metric tons from the previous session, exchange data on copper showed.
