NEW YORK (Dow Jones)--Comex gold futures were near steady Monday as a stronger dollar balanced out investor appetite for gold as an alternative currency.
The most actively traded contract, for December delivery, was recently up 0.3%, or $3.90, at $1,369.40 per troy ounce on the Comex division of the New York Mercantile Exchange.
A stronger dollar kept gold's gains muted Monday. Dollar-denominated gold futures tend to ease when the dollar strengthens, as they become more expensive to buyers using foreign currencies.
"The stronger dollar is pulling all the commodities down a little," said Jimmy Tintle, analyst at Transworld Futures.
The greenback advanced against the euro as currency traders eyed Ireland's debt burden and worried the euro-zone member may request a bailout. The euro was recently at $1.3657, from $1.3751 earlier.
The dollar also traded near a six-month high versus the yen after better-than-expected Japanese growth figures made the safe-harbor currency less attractive.
Investors typically buy gold futures to hedge against such currency risks, as gold is considered an alternative currency.
However, gold's record high prices are making some market participants skeptical whether it is too expensive to serve that role. The precious metal had rallied to a record high of $1,424.30 on Nov. 9, helped higher by the Federal Reserve's monetary stimulus and investor concerns about inflation, but prices have eased in recent sessions as investors booked profits.
"Gold has had an extremely good run and some people are staying out of it because its overpriced to be used as a currency alternative," Tintle said.
Nonetheless, long-term investor interest in gold remains strong. Gold volumes held in exchange-traded-funds were unchanged on Friday and "are less than 20 (metric tons) shy of the all-time high reached in mid-October at 2143 (metric tons)," writes Barclays Capital analyst Suki Cooper.
-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; tatyana.shumsky@dowjones.com
