MW: Gold tumbles as Europe fears spark run to cash
By Laura Mandaro and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures fell Monday, adding to losses as concerns about French banks sparked a stock selloff, putting pressure on investors to sell other assets to cover their losses.
“Gold sell stops are being placed as asset managers need to raise cash to stem portfolio losses,” said George Gero, vice president in global futures at RBC Capital Markets, in emailed comments.
Gold for December delivery GC1Z -1.24% fell $27.5, or 1.5%, to $1,831 an ounce on the Comex division of the New York Mercantile Exchange.
The retreat for gold deepened at the start of the New York trading session after a selloff for bullion in Asia and European hours, alongside a pullback in equity markets around the globe.
European and U.S. stocks tumbled on a report Moody’s Investors Service is considering a downgrade of French banks due to their exposure to Greece. Stocks had dropped sharply Friday on worries that the euro-zone’s more stable economies were becoming more reluctant to prevent the so-called peripheral countries, such as Greece and Italy, from defaulting.
The Dow Jones Industrial Average DJIA -0.88% fell 37.12 points, or 0.4%, to 10,953.57. Europe’s Stoxx 600 XX:SXXP -2.22% tumbled 2.5%. Japan’s Nikkei Stock Average JP:NIK -2.28% fell 2.3%.
The dollar index DXY -0.08% , which measures the U.S. unit against a basket of six major rivals, rose to 77.12, from 77.066 late Friday in North American trading. Read more about currencies.
A stronger greenback tends to make gold and other dollar-priced commodities less attractive to holders of other currencies.
The broader metals complex also started the week on a downbeat note.
Silver for December delivery SI1Z -1.25% fell 46 cents, or 1.1%, to $41.18 an ounce.
December copper HG1Z -1.10% dropped 4 cents, or 1.1%, to $3.96 a pound.
Platinum and palladium also traded down, with October platinum PL1V -0.91% off by $16.5, or 0.9%, to $1,821.40 an ounce. December palladium PA1Z -1.61% lost $9.2, or 1.3%, to $729.40 an ounce.
Laura Mandaro is a MarketWatch editor, based in San Francisco.
Virginia Harrison is a MarketWatch reporter based in Sydney.
