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 and spurred investors to sell other assets to cover losses.
Gold for December delivery GC1Z -2.35% was down $38, or 2%, at $1,821.60 an ounce on the Comex division of the New York Mercantile Exchange.
“Gold sell stops are being placed as asset managers need to raise cash to stem portfolio losses,” wrote George Gero, vice president in global futures at RBC Capital Markets, in emailed comments.
With gold’s recent record run, some investors also have judged it overvalued, according to Stephen Platt, a commodity analyst with Archer Financial Services in Chicago.
Gold set an intraday record of $1,923.70 an ounce Tuesday last week, but the failure “to make new highs and sustain them was a source of disappointment,” he said.
The retreat for gold deepened at the start of the New York trading session after a selloff for bullion in Asia and European market action, alongside a pullback in equity markets around the globe.
European and U.S. stocks tumbled on a report that 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 -0.99% added to losses, recently off 105 points, or 1%, at 10,886. Europe’s Stoxx 600 XX:SXXP -2.52% dropped 2.5%. Japan’s Nikkei Stock Average JP:NIK -2.28% was off 2.3%.
Exacerbating the pressure on gold, the dollar index DXY +0.26% , which measures the U.S. unit against a basket of six major rivals, rose to 77.258, from 77.066 late Friday in North American trading. A stronger greenback tends to make gold and other dollar-priced commodities less attractive to holders of other currencies. Read more about currencies.
The broader metals complex also started the week on a downbeat note. Silver for December delivery SI1Z -3.18% fell $1.20, or 3.1%, at $40.37 an ounce.
December copper HG1Z -0.92% dropped 4 cents, or 0.9%, at $3.97 a pound.
Platinum and palladium also traded down, with October platinum PL1V -1.64% off $28.60, or 1.6%, at $1,809.30 an ounce. December palladium PA1Z -3.87% lost $22.90, or 3.1%, at $715.70 an ounce.
Laura Mandaro is a MarketWatch editor, based in San Francisco.
Virginia Harrison is a MarketWatch reporter based in Sydney.
