By Claudia Assis and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures dipped below $1,420 an ounce Monday as investors shied away from the metal, lacking a fresh reason on the geopolitical front to turn their attention to gold.
Gold for April delivery (GCJ11 1,416, -10.00, -0.70%) declined $11, or 0.8%, to $1,415.20 an ounce on the Comex division of the New York Mercantile Exchange. A close around these levels would be the lowest in a little more than a week.
Gains for the dollar, albeit modest, have “given the bear camp the initial edge this morning,” analysts at MS Futures said in a note to clients Monday. A “lack of significant fresh developments from current geopolitical issues has resulted in some anxiety draining out of markets like gold,” they added.
Hawkish comments from a U.S. Federal Reserve official over the weekend also appeared to influence gold negatively, the analysts said.
On Saturday in France, nonvoting member St. Louis Federal Reserve Bank President James Bullard said policy makers should review the quantitative-easing plan as the U.S. economy may not need all the stimulus.
As the geopolitical tensions around the globe are not going away any time soon, however, they continue “to suggest a rise in the price of gold, which should therefore resume its uptrend soon,” analysts at Commerzbank said in a note to clients.
Investors’ anxieties center mainly around Japan’s nuclear crisis, conflict in Libya, unrest in the Middle East, and debt crisis in euro-zone peripheral countries, they said.
The European Central Bank is putting together a plan to help Irish banks, The Wall Street Journal reported. The plan would come as Ireland is preparing to announce the results of its stress tests on its banks. Read more about liquidity program for Irish banks
In Libya, antigovernment forces gained ground on Sunday, while protests intensified in Syria and Yemen. Read more about turmoil in Libya and Middle East
Meanwhile efforts to contain the nuclear crisis in Japan continued over the weekend, with rising concerns over radiation levels in nearby seawater. Read more about Japan’s nuclear crisis
The dollar index (DXY 76.06, -0.16, -0.21%) , which compares the U.S. unit to a basket of six other currencies, traded at 76.131, compared with 76.242 in North American trade late Friday. The index traded higher earlier, however, contributing to the price pressure for the metal.
Silver for May delivery (SIK11 3,683, -21.90, -0.59%) tracked gold lower, losing 13 cents, or 0.4%, to $36.93 an ounce.
May copper (HGK11 434.45, -7.45, -1.69%) was also weaker, down 1.3%, or 5 cents, to $4.36 a pound.
Sister metals platinum and palladium were also trading lower, with palladium (PAM11 746.35, -4.05, -0.54%) for June delivery off by $4.40, or 0.6%, to $746 an ounce.
July platinum (PLN11 1,742, -7.60, -0.43%) , the contract with the most open interest, fell $9.50, or 0.5%, to $1,740.90 an ounce.
