By Virginia Harrison and Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Gold futures pushed lower in electronic trading on Monday, as investors paused after a strong rally last week brought about by the Federal Reserve’s latest bond-buying plan.
Gold for December delivery GCZ2 -0.10% fell $1.20 to $1,771.40 an ounce on the Comex division of the New York Mercantile Exchange during European trading hours.
The metal notched a 1.9% gain last week as plans by the Federal Reserve to launch fresh monetary easing measures spurred demand for the metal.
Gold is seen as a hedge against inflation and tends to benefit amid fears of currency debasement.
On Monday, however, a slightly stronger dollar added pressure on metals prices. The ICE dollar index DXY +0.17% rose to 78.884 from 78.864 in late U.S. trading on Friday, which was its lowest level since May.
Dollar-denominated currencies tend to fall on stronger dollar, as they get more expensive for other currency-holders.
Anne-Laure Tremblay, BNP Paribas precious metals strategist, said, however, that accommodative policy stances by central banks could provide more support.
“Additional market liquidity and higher risk appetite are the two main factors that underpin our positive price forecast in the fourth-quarter of 2012, and first-half of 2013,” Tremblay wrote in a research report.
Base metals were on the decline, as weak Chinese equity markets, among other things, are “putting the brakes on the upswing,” analysts at Commerzbank said in a note.
“We do not see this as a trend reversal, however, but more as a brief time-out from the current upwards trend,” they said.
Elsewhere in the metals complex, most futures were on the decline.
Silver for December delivery SIZ2 -0.32% lost 12 cents, or 0.4%, to $34.54 an ounce.
Copper for the same month HGZ2 -1.02% lost 4 cents, or 1%, to $3.81 a pound.
October platinum PLV2 -0.95% dropped $17.80, or 1%, to $1,695.90 an ounce. December palladium PAZ2 -1.59% declined $12.15, or 1.7%, to $687.20 an ounce.
Virginia Harrison is a MarketWatch reporter based in Sydney.
Sara Sjolin is a MarketWatch reporter, based in London.
