Metal trades 1.4% lower as investors flee to cash
By Claudia Assis and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures slipped Monday as investors took money away from stocks and other commodities and the metal failed to attract safe-haven flows.
Gold for December delivery GC1Z -1.21% lost $24.90, or 1.4%, to trade at $1,701 an ounce on the Comex division of the New York Mercantile Exchange.
“Gold is caught in the same flight to cash as everything else,” said Adrian Ash, head of research at BullionVault.
Investors worried about the impeding failure of the “supercommittee” in the U.S., in which lawmakers of a deficit-reduction committee could not agree on how to shave more than 1 trillion in federal debt.
That added to lingering concerns about the euro zone’s debt crisis, with France back in the spotlight .
Rising government borrowing costs and an uncertain economic outlook continue to pose a threat to the outlook for France’s AAA credit rating, Moody’s Investors Service said Monday.
Adding to the day’s negatives, the dollar rose to a six-week high. The dollar index DXY +0.52% , which compares the greenback against a basket of six other major currencies, rose to 78.433, up from 78.098 Friday
Gold closed out Friday’s North American session with a weekly loss of 3.5%, breaking a three-week winning streak. Read more about Friday's metals session.
Optimistic outlook
Despite recent weakness, BNP Paribas precious-metals strategist Anne-Laure Tremblay remained bullish on the outlook for gold, “boosted by its safe-haven status in an environment of heightened uncertainty.”
“In the near term, gold should continue to outperform the rest of the precious metals complex,” Tremblay wrote in a research note.
