By Myra P. Saefong and Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures fell Monday as investors worried about finances in Spain and Greece and the U.S. dollar rose to a two-year high against the euro.
Gold for August delivery GCQ2 -0.50% lost $7.50, or 0.5%, to $1,575.20 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’.”
The dollar index DXY +0.36% climbed to 83.737 from 83.457 in late Friday in North American trading. The euro fell to $1.2078 from $1.2161.
A stronger dollar puts a crimp on dollar-denominated commodities as it makes them more expensive for holders of other currencies. 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.
Spanish and Italian bond yields soared.
Meanwhile, a weekend report in Germany’s Der Spiegel magazine said the International Monetary Fund is set to stop aid payments to the Greece, feeding fears that the country could default as early as September. Read more on Greece.
In a statement Monday in response to the magazine, 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 -1.27% lost 32 cents, or 1.2%, cents, to $26.99 an ounce, while September copper HGU2 -2.48% was down 9 cents, or 2.5%, to $3.36 a pound.
Platinum and palladium also declined, with October platinum PLV2 -1.18% losing $16.60, or 1.2%, to $1,397.90 an ounce. September palladium PAU2 -1.07% retreated $8.25, or 1.4%, to $567.85 an ounce.
Myra Saefong is a MarketWatch reporter based in San Francisco.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
