MW:Gold, silver fall sharply in electronic trading
By Virginia Harrison and Kim Hjelmgaard, MarketWatch
LONDON (MarketWatch)—Gold futures, which saw modest losses during Asian trading hours, accelerated declines during European electronic trading Monday, as a push to the safety of the U.S. dollar weighed on demand for metals.
Gold for June delivery GCM2 -1.39% dropped $12.90, or 0.8%, to $1,570.90 an ounce on the Comex division of the New York Mercantile Exchange.
The soft start to the trading week came after the metal settled at its lowest level this year on Friday, as political turmoil in Europe prompted investors to flock to the U.S. dollar over other asset classes.
Talks between potential coalition partners collapsed in Greece on Sunday, raising the likelihood of fresh elections and stirring fears about the future of the euro zone. Greece's political turmoil.
Against the backdrop of European uncertainty, the dollar continued its climb higher on Monday, with the ICE dollar index DXY +0.33% , which measures the U.S. unit against a basket of six other currencies, at 80.463, from 80.250 in late North American trading Friday.
A stronger greenback adds further pressure to dollar-priced commodities such as gold, as it drives up to cost of the metal for holders of other currencies.
The market brushed aside weekend news that the People’s Bank of China will lower the ratio of reserves banks must set aside as deposits at the central bank by a half percentage point. The move was came recent data showing a slowdown for the nation, which is a big user of natural resources.
The broader metals complex tracked gold lower, with copper the leading decliner. July copper HGN2 -2.51% fell 7 cents, or 2%, to $3.58 a pound.
Silver for July delivery SIN2 -1.99% declined 41 cents, or 1.4%, to$28.49 an ounce.
Platinum for July delivery PLN2 -1.33% dropped $14.50, or 1%, to $1,456.90 an ounce, while June palladium PAM2 -1.90% eased $7.40, or 1.2%, to $596.00 an ounce.
Virginia Harrison is a MarketWatch reporter based in Sydney.
Kim Hjelmgaard is a MarketWatch editor based in London.
