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Gold drops on dollar strength

  • SOURCE: | Editor
  • goldGold prices tumbled on Monday, unwinding some of the jobs-data-fueled gains seen late last week, as the dollar found renewed strength against the yen.

    Gold for June delivery GCM6, -1.29% fell $15.40, or 1.2%, to $1,278.60 an ounce after Friday’s weaker-than-expected payrolls triggered sharp gains for gold prices. Gold rose $21.70, or 1.7%, to finish at $1.294 an ounce on Friday.

    Meanwhile, July silver SIN6, -0.75% on Monday was down 11 cents, or 0.6%, to $17.42 an ounce. Silver dropped 1.2% on Friday.

    Gold rose Friday after weaker-than-expected jobs data boosted expectations that the Federal Reserve would not likely be raising interest rates soon. Lower interest rates tend to pressure the dollar and boost dollar-denominated assets such as gold.
    Chipping away at precious metals on Monday was a stronger U.S. dollar USDJPY, 0.84% notably against the Japanese yen, as investors were taking a fresh look at signs of healthy wage inflation on Friday and how it could actually keep the Fed moving forward on interest-rate hikes.

    Elsewhere in the metals complex, high-grade copper HGN6, -1.60% for July delivery fell 3 cents, or 1.5%, to $2.121 a pound, under pressure after China trade data. Exports unexpectedly fell 1.8% in April on an annual basis, due to weak demand and imports fell by a sharper-than-expected 10.9% from a year earlier.

    China is one of the biggest consumers of copper in the world. In addition on Monday, the Shanghai Composite Index SHCOMP, -2.79% slid nearly 2.8% after the Communist Party’s mouthpiece reported the nation’s economy is headed for an “L-shaped” recovery, stoking fears of a further slowdown in growth. An L-shaped recovery refers to a plunge in key economic measures followed by a period of flat growth.

    July platinum PLN6, -1.52% fell $16.10, or 1.5%, to $1,069 an ounce, while June palladium PAM6, -1.24% slid $6.30, or 1%, to $600.90 an ounce.


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