By Barbara Kollmeyer and Carla Mozee, MarketWatch
MADRID (MarketWatch) — Gold futures declined on Tuesday as the dollar reversed a pullback after downbeat data from Germany.
Gold for June delivery GCM3 -0.70% fell $7.40, or 0.5%, to $1,426.90 an ounce on the New York Mercantile Exchange.
Dollar-denominated gold had earlier found relief as the greenback fell. However, the U.S. dollar reversed that pullback and rose against the euro after data showed weaker-than-expected German investor confidence.
Gold and other dollar-denominated commodities tend to rise when the dollar weakens, as it makes them less expensive for holders of other currencies.
Gold prices on Monday fell $2.30, or 0.2%, on the Comex division of the New York Mercantile Exchange as the dollar strengthened and as investors weighed a report indicating the U.S. Federal Reserve is preparing to bring current monetary stimulus to an end.
The Fed has mapped out a plan for winding down its program of buying $85 billion in bonds each month, according to a report in The Wall Street Journal late Friday.
Tapering the Fed’s bond-buying program would make the U.S. dollar more attractive in terms of yield, analysts say. Also, the easy monetary policy tends to raise the risk of inflation, and gold is seen as a hedge against inflation.
In other metals action Tuesday, silver for July delivery SIN3 -1.97% fell 37 cents to $23.31 an ounce, while copper for July delivery HGN3 -2.23% fell 8 cents, or 2.3%, to $3.28 a pound.
June palladium PAM3 -0.81% fell $6.76, or 1%, to $711.80 an ounce while July platinum PLN3 +0.21% rose $4.10, or 0.3%, to $1,488.20 an ounce. A report released Monday by Johnson Matthey showed that supplies of both metals swung to a deficit last year.
Workers at Lonmin PLC UK:LMI -6.89% held a wildcat strike Tuesday morning, which shuttered the Marikana mine and triggered worries about fresh violence at the site of protests that resulted in the deaths of 34 people. Lonmin suspended all work at the mine after employees refused to go underground.
Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @MWBarbaraKollmeyer.
Carla Mozee is a reporter for MarketWatch, based in Los Angeles. Follow her on Twitter @MWMozee.
