Dollar strength weighs on prices even as Greek debt offers support
By Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures fell by as much as $30 an ounce Friday, retreating from an earlier high of more than $1,830 as strength in the U.S. dollar dulled demand for the precious metal.
Gold for December delivery GC1Z -1.43% traded down $20.20, or 1.2%, to $1,794.50 an ounce on the Comex division of the New York Mercantile Exchange Monday morning after tapping a fresh session low of $1,784.40.
“Continued diversification towards gold looks set to keep the metal underpinned ... but one threat to gold remains the announcement, or at least the suggestion, of further stimulus measures by the [Federal Reserve],” James Moore, an analyst at TheBullionDesk.com said in a note to clients.
The Federal Open Market Committee will conduct a two-day monetary policy meeting this week that ends on Wednesday.
For now, a stronger dollar was the immediate concern for the precious metal. A higher dollar is usually negative for commodities as it makes them more expensive for holders of other currencies.
The dollar index DXY +0.95% which compares the U.S. unit to a basket of six currencies, traded at 77.430 from 76.614 in North American trade late Friday.
But growing concerns over the potential for a Greek default offered earlier support to gold. The December gold contract had climbed to as high as $1,832.90 an ounce.
Most other metals traded lower, with December silver SI1Z -2.94% trading down $1.14 to $39.70 an ounce.
The December copper contract HG1Z -3.79% was down 14 cents at $3.79 a pound.
October platinum PL1V -1.88% fell $24.80 to settle at $1,789.10 and palladium for December delivery PA1Z -2.61% shed $17.45 to $715.50 an ounce.
