Metal looking at possible fourth consecutive losing session
By Claudia Assis and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures fell Tuesday, trading at their lowest in nearly two weeks and appearing set for a fourth consecutive lower close as investors locked in some recent profits.
Gold for June delivery (GCM11 1,422, +0.20, +0.01%) , the most active contract, fell $1.20 to $1,420.20 an ounce on the Comex division of the New York Mercantile Exchange. It had earlier traded as low as $1,412.10 an ounce.
Prices came off lows, however, as a key gauge of consumer confidence fell sharply in March, the nonprofit Conference Board said. The report pointed to rising prices of food and energy as the main source of worries for U.S. consumers.
Gold rallied to an intraday record high of $1,448.60 an ounce last week, supported by political unrest in the Mideast and North Africa, as well as by Japan’s struggle to stabilize a damaged nuclear-power plant.
“Investors are clearly still taking profits after the price of gold marked a new record high last week,” Commerzbank analysts said in a note.
“The fall in price yesterday was accompanied by outflows from gold ETFs [exchange-traded funds],” they said.
Gold is typically seen as a safe-haven asset that keeps its value in times of turmoil.
Such turmoil was mainly coming from news Japan was still struggling to contain radiation leaks at its crippled Fukushima Daiichi power plant. As workers tried to stem radioactive water from leaking, Prime Minister Naoto Kan said the government was in “maximum alert” and called the situation at the power plant “unpredictable.”
Metals traders also kept an eye on the currency markets, with the dollar boosted by comments from a U.S. Federal Reserve official.
The dollar index (DXY 76.33, +0.21, +0.27%) , which compares the U.S. unit to a basket of six other currencies, traded at 76.244, up from 76.182 in North American trade late Monday.
Federal Reserve Bank of St. Louis President James Bullard said policy makers may begin to tighten monetary policy without waiting for a resolution of the global economy.
Fears of currency debasement and loose monetary policy are a top reason for gold’s decades-long bull market.
Other metals futures were also lower on Tuesday, although prices also came off lows.
Silver for May delivery (SIK11 3,707, -2.30, -0.06%) fell 10 cents, or 0.3%, to $36.98 an ounce. May copper (HGK11 434.75, -0.25, -0.06%) dropped less than a penny to $4.34 a pound.
