MW: Gold falls on dollar gains, Europe, China worries
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — Gold and silver prices fell in electronic trade during Monday business hours in Europe, as the dollar rose on risk aversion amid worrying political developments in the euro zone and as China data showed continued contraction for the manufacturing sector.
Gold for June delivery GCM2 -0.71% fell $13 to $1,629.80 an ounce, down from the contract’s settlement at $1,642.80 Friday on the Comex division of the New York Mercantile Exchange, losing 1% on the week.
May silver SIK2 -3.10% fell 67 cents, or 2%, to $30.98 an ounce, as the dollar index DXY +0.49% jumped to 79.507 from 79.140 in late North American trading on Friday, making the metal slightly more expensive for holders of other currencies.
The dollar rose amid increased political risk in Europe after the Socialist Party candidate for the French presidential election, Francois Hollande took a narrow lead in the first round of the country’s election. Far-right candidate Marine Le Pen finished a surprise third.
Europe stocks got hammered Monday, with the Stoxx Europe 600 index XX:SXXP -2.53% tumbling more than 2% to 252.37 and yields for several European 10-year government bonds seeing pressure. A preliminary purchasing-managers survey from Markit showed business activity across the euro area contracting at a faster-than-expected pace.
Adding to that, the Netherlands is facing an early election as Dutch Prime Minister Mark Rutte is reportedly due to resign Monday after the weekend collapse of budget talks. The right-wing Freedom Party walked out of budget negotiations calling for extra budget cuts, and strategists are worried Holland's triple-A credit rating could be under threat.
In Asia, stocks also came under pressure after data showing Chinese manufacturing activity continued a contraction in April, though at a slower pace.
U.S. stock-market futures were pointing to a sharply lower open for Wall Street.
Copper for May delivery HGK2 -2.20% fell 7 cents, or 2%, to $3.62 per pound.
July platinum PLN2 -1.68% lost $18.80, or 1.2%, to $1,565.40 an ounce.
Sister metal palladium for June delivery PAM2 -1.34% dropped $10.30, or 1.5%, to $666.60 an ounce.
Barbara Kollmeyer is an editor for MarketWatch in Madrid.
