MW: Gold in reversal, inches lower as early support fades
NEW YORK (MarketWatch) -- Gold futures reversed course to edge lower Monday, as U.S. equity opened in the green, undercutting early support for the metal on concerns about inflation.
Gold for December delivery lost $1.40, or 0.1%, to $1,204.10 an ounce on the New York Mercantile Exchange. Gold post gains earlier, hitting an intraday high of $1,212.10 an ounce.
There's some concern about inflation ahead of a key Federal Reserve meeting on Tuesday, and worries about the recovery haven't dissipated and spurred some of the initial demand for the metal.
A disappointing U.S. employment report issued at the end of last week showed that private-sector payrolls expanded by only 71,000 during July. Read more about the jobs data here.
The disappointing report added to fears about the recovery and fueled expectations that the Federal Reserve will take steps to augment an already-accommodative monetary policy -- boosting gold's appeal as an investment safe haven and as a hedge against inflation.
But should the Federal Open Market Committee decide against further action and the dollar strengthens, gold prices could fall again, said analysts at Barclays Capital in a note Monday. Still, prices likely would be able to garner some support as a result of physical demand ahead of India's wedding season, they said.
The FOMC's scheduled to announce results of its meeting on the economy and interest rates Tuesday at 2:15 p.m. Eastern.
