Gold lost ground Monday, finding flight-to-safety buying interest in short supply as global equities resumed a rally and the Japanese yen — another traditional haven — slumped versus the U.S. dollar.
Gold for February delivery
GCG20, -0.57%
on Comex fell $4.40, or 0.3%, to $1,555.70 an ounce, while March silver
SIH20, -0.69%
was off 6.5 cents, or 0.4%, at $18.04 an ounce.
The U.S. dollar rose 0.3% to trade at 109.83 yen
USDJPY, +0.40%
after hitting its highest level versus the Japanese currency since late May. A stronger dollar is often seen as a negative for gold and other commodities priced in the unit, making them more expensive to users of other currencies. In addition, the Japanese yen is also seen as arguably the biggest beneficiary of haven flows during bouts of geopolitical uncertainty.
“If the price action on this pair is anything to go by then gold could head in the opposite direction as demand for safe-haven assets drop back with the U.S.-Iran tensions easing,” said Fawad Razaqzada, market analyst at Forex.com, in a note.
“Indeed, gold and the USD/JPY tend to have a strong negative correlation with one another. Gold bugs better hope then that either the negative correlation breaks down or the breakout in the USD/JPY turns out to be a fake one,” he said.
In other metals trading, April platinum
PLJ20, -1.24%
fell 0.4% to $981.80 an ounce, while March palladium
PAH20, +0.14%
was up 0.8% at $2,089.50 an ounce.
March copper
HGH20, +1.08%
rose 0.6% to $2.829 a pound.
Source : MTV
