NEW YORK (Dow Jones)--Gold futures were near steady Monday along with the U.S. dollar, creating a lull in the metal's record rally as expectations continue for the Federal Reserve to move to jumpstart the economy.
The most-actively traded copper contract, for December delivery, recently was down 20 cents at $1,345.10 an ounce on the Comex division of the New York Mercantile Exchange.
While the euro was near steady against the dollar on Monday, the ICE Futures U.S. Dollar index was 0.2% higher, after ministers attending the International Monetary Fund conference over the weekend didn't come up with any new currency coordination.
Gold, as a perceived currency and inflation hedge, often moves inversely with the dollar. This relationship has been heightened recently as expectations have risen for a second round of monetary stimulus from the Federal Reserve. Some believe that will weaken the buck and increase the likelihood for inflation in coming years.
The metal also tends to track against the dollar because it is dollar-denominated. A stronger dollar makes it more expensive for buyers using other currencies, dampening demand.
Weaker-than-expected employment figures on Friday had caused gold futures to rally by bumping up expectations of further U.S. monetary easing and sending investors into the metal to hedge a weakening dollar.
Expectations of such so-called quantitative easing, which could include the purchase of Treasurys, have been a strong support of gold prices lately, helping send the metal to a record $1,366 last week.
"The broader macro environment remains favorable for gold with market anticipation of further quantitative easing and concerns about the shape of the economic recovery continuing to support interest," said Suki Cooper, analyst with Barclays Capital.
-By Matt Whittaker, Dow Jones Newswires; 212-416-2139; matt.whittaker@dowjones.com
