Gold extended last week’s losses on Monday as news of China’s worsening COVID-19 situation supported the U.S. dollar, while weighing broadly on commodity and equity prices.
Gold for December
delivery fell $14.80, or 0.8%, to settle at $1,739.60 per ounce on Comex.
dropped 12 cents, or 0.6%, ending at $20.87 per ounce.
Palladium for December delivery
fell $85.90, or 4.4%, to finish at $1,853 per ounce, while platinum for January delivery
lost $3.60, or 0.4%, to settle at $987.90 per ounce.
Copper for December delivery
lost 6 cents, or 1.7%, to end at $3.57 per pound.
Gold prices were slipping to start the week in risk-averse trade that was supporting the U.S. dollar. The ICE U.S. Dollar Index
a gauge of the dollar’s strength against a basket of rivals, was up 0.9%, at 107.84.
China imposed strict new COVID-19 measures in Beijing after the country reported its first death in almost six months. This has weighed on equity markets along with gold and other commodities. The news has sent the price of the most-active gold contract back below $1,740 a share as the latest price run-up has started to erode.
The news out of China “has stock and commodity markets under pressure due to global demand worries,” said Kitco senior analyst Jim Wyckoff.
“Gold will only be a safe-haven trade if the dollar is in a defensive mode and that is not happening here,” said Edward Moya, senior market analyst with OANDA. “Gold needs China’s COVID situation to improve before it can start to look attractive again for investors. If the dollar rally turns excessive, gold could be vulnerable to a plunge towards the $1,700 level.”
Crude-oil prices also tumbled
after The Wall Street Journal reported Saudi Arabia and other OPEC oil producers are discussing an output increase. Crude subsequently bounced after Saudi Arabia’s energy minister denied the report. West Texas Intermediate crude for December delivery
fell 2 cents, or less than 0.1%, to $80.06 a barrel, after trading as low as $75.08, its lowest level since January.