By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures retreated Monday after ending the previous session at a record high that left the price just a stone’s throw away from $1,400 an ounce.
Gold for December delivery (GCZ10 1,393, -5.20, -0.37%) traded off $7.20, or 0.5%, to $1,391.20 an ounce on the Comex division of the New York Mercantile Exchange.
The gold contract’s Friday settlement at $1,397.70 an ounce was a record for the metal. Silver and copper also hit historic high marks.
The catalyst was the Federal Reserve’s decision to embark on a fresh round of bond buying, to the tune of $600 billion over eight months. This gave investors a fresh reason to sell the dollar.
The dollar traded stronger to start the week, however. The dollar index (DXY 77.06, +0.51, +0.67%) , which tracks the performance of the greenback against a basket of six rival currencies, rose 0.5% to 76.97.
The euro weakened as bonds from Greece, Ireland and Portugal came under pressure, a fresh flare-up from the sovereign-debt problems Europe has faced for much of the year. See more on how dollar rises as debt fears weigh on euro.
As world leaders prepare to meet in Seoul this week, Robert Zoellick, president of the World Bank, said in a Financial Times op-ed piece that leading economies should consider “employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”
A return to some sort of currency link to gold would be “practical and feasible, not radical,” Zoellick said. He made the proposal as part of reforms to be considered ahead of the Group of 20 meetings in South Korea. Read more about Zoellick's comments
Meanwhile, silver continued to rally, pushing toward $27 an ounce. Silver for December delivery (SIZ10 2,678, +2.70, +0.10%) added 8 cents, or 0.3%, to $26.83.
