MW: Gold futures head lower after two-session climb
By Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures fell Monday on the heels of a two-session climb, pressured as concerns over finances in Spain and Greece helped fuel a rise in the U.S. dollar to a two-year high against the euro.
Gold for August delivery GCQ2 -0.78% lost $11.80, or 0.8%, to $1,571 an ounce on the Comex division of the New York Mercantile Exchange. The contract had gained about $12 over the past two sessions, though ended Friday with a weekly loss of 0.6%.
“The ad nauseam continuation of euro zone and euro fears [continue] to grow,” said Julian Phillips, an editor at GoldForecaster.com, in his latest newsletter.
“This is again translating into a strong dollar,” he said. “Clearly this has nothing to do with gold, except for the knee-jerk reaction that a ‘strong dollar means weak gold’.”
“But as investors understand this, they will then see that gold is not just a ‘counter to the dollar’, but to all currencies,” he said. ”When this happens, gold will rise [in dollar terms].”
The dollar index DXY +0.45% climbed to 83.921 from up to 83.474 from 83.457 on Friday in North American trading as the euro fell to $1.2078 from $1.2161. The stronger dollar pressures prices for dollar-denominated commodities. Read more on currencies.
The Spanish government lowered its gross domestic product estimates from this year through 2014 last week, while the region of Valencia said it would seek financial aid as it struggles to refinance maturing debts.
Meanwhile, a weekend report in Germany’s De Spiegel magazine said the International Monetary Fund is set to stop aid payments to the struggling countries, feeding fears of a default. Read more on Greece.
But in a statement Monday, the IMF said it “is supporting Greece in overcoming its economic difficulties,” and that an IMF mission will start discussions with Greece’s authorities on July 24 “on how to bring Greece’s economic program back on track.”
In other precious-metals trading, silver for September delivery SIU2 -1.82% lost 46 cents, or 1.7%, cents, to $26.85 an ounce, while September copper HGU2 -2.74% was down 10 cents, or 2.9%, to $3.35 a pound.
Platinum and palladium also declined, with October platinum PLV2 -1.36% losing $18.50, or 1.3%, to $1,396 an ounce. September palladium PAU2 -1.69% retreated $10.65, or 1.9%, to $565.45 an ounce.
Myra Saefong is a MarketWatch reporter based in San Francisco.
