By Polya Lesova, MarketWatch
LONDON (MarketWatch) — Gold and silver futures dropped sharply Monday, while the U.S. dollar surged after Japan intervened in the currency markets to weaken the yen.
Gold for December delivery GC1Z -0.24% slumped $28.20, or 1.6%, to $1,719 an ounce in electronic trading on Globex.
“Gold and other precious metals are being knocked this morning by profit-taking and the strong U.S. dollar,” said analysts at Commerzbank in a note.
The dollar surged against the yen to trade as high as 79.53 yen, according to FactSet Research data, after the Bank of Japan sold an undisclosed amount of yen on the foreign-exchange market Monday.
The dollar index DXY +1.08% , which tracks the performance of the greenback against a basket of other major currencies, rallied 1.2% to 75.968. Read more about currencies.
Dollar-denominated gold prices tend to fall when the dollar rises because that makes the metal more expensive for holders of other currencies.
Silver futures for December delivery SI1Z +0.74% fell 88 cents, or 2.5%, to $34.41 an ounce in electronic trading.
Polya Lesova is chief of MarketWatch’s London bureau.
