Gold eases below $1,500 in choppy trade
SAN FRANCISCO (MarketWatch) — Gold futures settled below the $1,500-mark Monday as the U.S. currency’s weakness and the U.S. debt limit vied for investors’ attention.
Gold prices had fallen earlier Monday as the dollar initially gained against the euro following news of the arrest of the head of the International Monetary Fund Dominique Strauss-Kahn. Read more on Strauss-Kahn's arrest.
The precious metal then recovered to successfully test $1,500 per ounce as analysts said Strauss-Kahn’s arrest was unlikely to table talks on restructuring Greek debt, supporting the euro and driving the U.S. dollar lower. But as the New York floor session ended, gold failed to defend its gains as investors increasingly focused on the impending U.S. debt ceiling issue.
“If Congress reaches an agreement which cuts government spending in order to extend the debt limit, the economy will suffer. Stocks go down on that, and so do precious metals,” Jay Feuerstein, chief executive officer of 2100 Xenon Group, said in an email.
Gold for June (COMMODITIES:GCM11) delivery lost $3, or 0.2%, to settle at $1,490.60 an ounce on the Comex division of the New York Mercantile Exchange.
Silver prices also slid, with silver for July delivery (COMMODITIES:SIN11) shedding 88 cents, or 2.5%, to $34.13 an ounce.
“It will be important to keep an eye on Eurozone inflation estimates this week,” Andrey Kryuchenkov, an analyst at VTB Capital said in a note to clients. “In the meantime, we continue to swing back and forth with risk sentiment while still expecting range trading to continue from here.”
Dollar dealings
The dollar index (BOARD:DXY) traded at 75.457 on Monday, down from 75.761 in late North American trading Friday when it reached a six-week high against the euro.
The euro has suffered recently amid resurgent concerns about European sovereign debt woes.
But on Monday, the euro (U.S.:EURUSD) headed higher against the greenback as the currency market downplayed the impact of the arrest of IMF chief Strauss-Kahn on sexual-assault charges. Read about Monday‘s currencies action.
Strauss-Kahn had been one of the key players working to address Europe’s debt crisis. See story on IMF chief's arrest.
Strauss-Kahn had been scheduled to attend meetings to discuss the euro-zone debt crisis on Monday. Nemat Shafik will attend Monday’s Eurogroup meeting in Brussels in place of Strauss-Kahn, the IMF said. See story on IMF appointing acting MD.
In other metals trading, July copper (COMMODITIES:HGN11) rose a penny, or 0.2%, to settle at $3.99 a pound. July platinum (NEW:PLN11) fell $9.30, or 0.5%, to settle at $1,760 an ounce. June palladium (NEW:PAM11) gained $7.05, or 1%, to settle at $713.50 an ounce.
Growth in the automotive sector and strong investor interest fueled a rise in platinum and palladium demand in 2010, a platinum group metals refiner said Monday, and that’s likely to continue to support prices for the metals in the coming months. Read more about Johnson Matthey’s Platinum 2011 industry review report.
