MW: Gold futures fall first day in four as stocks rally
Gold futures fell Monday for the first session in four as rising global equities reduced the metal's investment appeal.
U.S. stocks followed on gains in European and Asian stocks as investors reacted to the Group of 20 nations' weekend promise to restore bank lending. Federal Reserve Chairman Ben Bernanke's remarks in a U.S. television interview on Sunday also boosted stocks.
Gold fell "as investors cautiously diverted some funds into equities following determined statements from various G20 summit attendees," said Jon Nadler, senior analyst at Kitco Bullion Dealers.
"A fairly sharp drop in the dollar and crude oil coupled with expectations of higher stock market values made for murky conditions in the commodities pits," he added.
Gold for April delivery, the most active contract, fell $11.10, or 1.2%, to $919 an ounce on the Comex division of the New York Mercantile Exchange. Gold gained 3.8% over the previous three straight sessions, but the benchmark contract fell 1.5% on the week.
G20 officials pledged Saturday to pull the global economy out of a steep downturn by focusing on efforts to restore bank lending, strengthen financial regulations and boost funding for the International Monetary Fund. See full story.
Meanwhile, Bernanke reiterated his prediction that the U.S. recession will come to an end "probably this year," assuming multilateral efforts to stabilize the financial system succeed, although he also warned that the nation's 8.1% unemployment rate will continue to rise. See full story.
Commodities traders were also disappointed after the Organization of Petroleum Exporting Countries decided to keep its production unchanged at a meeting on Sunday. OPEC's announcement pushed crude-oil prices low by more than 4%. See Futures Movers.
The April gold contract is now about $80, or 0.8%, lower than its recent high atop $1,000 hit on Feb. 20.
Gold's losses came despite another surge in demand from exchange-traded funds. Holdings in the SPDR Gold Shares the biggest gold ETF, hit a new high of 1,056.80 tons on Friday, up 15.29 tons from the prior day, according to the latest data from the fund.
SPDR gold holdings are now higher than those of Switzerland, the world's sixth-largest official gold holder.
Some analysts remain optimistic that gold prices will rebound soon.
"With ETF demand picking up we could see gold regain its luster and push back toward $1,000 an ounce," wrote James Moore, a precious metals analyst at TheBullionDesk.com
In other metals trading, silver for May delivery fell 2.7% to $12.865 an ounce, while April platinum lost 0.8% $1,055.20 an ounce. The June contract for palladium was also little changed at $200 an ounce.
Meanwhile, May copper added 2.9% to $1.7125 a pound.
