Gold prices drop as dollar’s strength weighs on metals

New York (Nov 23)  Gold futures fell on Monday, weighed by continued pressure from the dollar, as the rest of the metals sector followed suit.

December gold GCZ5, -0.59%  lost $6.50, or 0.6%, to $1,069.60 an ounce on Monday. The move downward has come amid expectations that the Federal Reserve will raise interest rates in December, which has boosted the greenback. The U.S. dollar index DXY, +0.09%  was moving toward the 100-level on Monday for the first time since March.

Hints of more stimulus in the eurozone from European Central Bank President Mario Draghi late last week also played a part in boosting the dollar and other rivals against the euro.

“[The] commodity rout continues (copper has gapped down), sending metals and oil lower as the U.S. dollar creeps north on expectations of euro-weakening ECB stimulus next week and a U.S. rate rise mid-month,” said Mike van Dulken, head of research at Accendo Markets, in a note Monday.

The dollar rebound was pressuring other metals across the board. December silver SIZ5, -1.21%  lost 16 cents, or 1.1%, to $13.94 an ounce on Monday.

Elsewhere on Comex, high-grade copper for December delivery HGZ5, -1.75%  lost 4 cents, or 1.8%, to $2.02 a pound, to reach a fresh six-year low.

”[Copper prices] are down 27% so far this year as fears that slowing economic growth in China, weakening growth in the eurozone and oversupply all culminate in a selloff,” said Brenda Kelly, head analyst at London Capital Group, in a note.

Platinum for delivery in January PLF6, -0.34%  was down $5.60, or 0.6%, to $850.00 an ounce, while December palladium PAZ5, -1.15%  fell $8.65, or 1.5%, to $553.55 an ounce.

Source: MarketWatch