MW: Gold falls as oil continues its slump; other metals mixed
NEW YORK (MarketWatch) -- Gold futures reversed earlier gains, falling on the heels of last week's drop as tumbling oil prices reduced the metal's appeal as a hedge against inflation.
With the gold contract having lost 1.6% last week, Monday's decline reflected how demand from gold exchange-traded funds remains weak. Traders and investors also awaited this week's quarterly financial results from big investment banks such as Goldman Sachs Group (GS 148.51, +6.64, +4.68%) .
Also helping gold move lower, the dollar pared earlier losses against the euro. A stronger dollar tends to put downward pressures on dollar-denominated gold prices.
August gold fell $3.40, or 0.4%, to $909.10 an ounce on Comex division of the New York Mercantile Exchange.
"Gold has come under pressure as traders tracked the euro and the dollar," said James Moore, analyst at TheBullionDesk.com, in a note. "With weak physical and investment demand the metal remains at risk to further downside pressure." See Currencies for more.
From a technical standpoint, "a failure to hold above to $905 could trigger a deeper move to $894," Moore noted.
In crude oil trading, August crude futures reversed earlier gains, down nearly 2% to below $59 a barrel. Oil had tumbled more than 10% last week, the biggest weekly loss in six months. See Futures Movers.
Holdings of the SPDR Gold Trust (GLD 89.63, +0.05, +0.05%) stood at 1,109.81 metric tons on Friday, unchanged from the prior day, according to latest data from the biggest exchange-traded fund specializing in gold. Holdings have fallen more than 22 metric tons in the past month.
Other metals were mixed to start the week. September copper was slightly higher at $2.218 a pound.
September silver lost 14.5 cents, or 1.2%, to $12.50 an ounce. October platinum fell $12.50, or 1.1%, to $1,095.10 an ounce, while the September contract for sister metal palladium dropped $2.35, or 1%, to $232.60 an ounce.
Copper inventories at the London Metal Exchange fell to 258,575 metric tons Friday, down 3,400 metric tons from a day ago, according to latest data from the exchange.
