LONDON (Reuters) - Gold fell in Europe on Monday, extending the previous session's 2 percent losses, as the firmer dollar reduced the precious metal's appeal as an alternative asset and oil prices declined.
Spot gold was bid at $948.35 an ounce at 0852 GMT, against $955.30 an ounce late in New York on Friday. Prices of the metal tumbled during that session as the dollar strengthened, leading to a close 2.4 percent below the previous Friday's.
"The weekly close below $960 an ounce is seen as pretty negative," said Calyon metals analyst Robin Bhar. "The dollar has broken back below $1.40 versus the euro, and if it continues to rally, that might put paid to commodities' rise."
The dollar climbed against a basket of currencies on Monday, extending the sharp gains it posted late last week, as U.S. Treasury yields rose to seven-month highs, prompting investors to cover short-dollar positions.
Strength in the U.S. currency has weighed on gold, as it makes dollar-priced commodities such as bullion more expensive for holders of other currencies.
Other commodities were also sold off, with oil, a key indicator of interest in the asset class, falling more than $1 a barrel or 2 percent, and industrial metals also softening.
Falling crude prices also dent interest in gold as a hedge against oil-led inflation.
Among other assets, European shares were pulled lower by losses in banking stocks, while financial markets could be in for further volatility this week.
