By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Gold prices saw a decline Monday as a firmer U.S. dollar weighed on commodities, including precious metals, that are priced in dollars.
Gold futures for February delivery GC2G -1.19% fell $17.20, or 1%, to $1,699.60 an ounce in electronic trading during the Asian day.
The fall more than offset the modest gains recorded by the metal during a regular session on the Comex division of the New York Mercantile Exchange Friday.
The U.S. dollar index DXY +0.23% , a measure of the greenback against six major global counterparts, rose to 78.76 from 78.622 in North American trade Friday, weighing on precious metals that are priced in the currency.
The drop for gold futures came as one analyst highlighted doubts about emerging market demand, noting last week’s data on a sharp drop in China’s inflation, and India’s reduction of its growth target for the financial year ending March 2012.
“Between them, India and China account for [about] 55% of global gold jewelry demand and without a strong import market in at least [the] two largest gold consumers, it would be difficult for gold prices to advance significantly and sustain a rally,” HSBC analyst James Steel wrote in a report.
Among other precious metals, the March contract for silver SI2H -1.62% declined 1.4% to $31.81 an ounce, palladium futures for the same month PA2H -1.68% lost 1.5% to $676.30 an ounce and January platinum PL2F -0.98% prices eased 0.8% to $1,503.50 an ounce.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
