Investing.com – Gold futures came under pressure on Monday, as mounting fears over a potential Greek default sent the U.S. dollar higher, undermining the appeal of commodities.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,835.95 a troy ounce during late Asian trade, dropping 1.1%.
It earlier fell as much as 1.7% to trade at a daily low of USD1,826.55 a troy ounce.
Germany’s Der Spiegel magazine reported over the weekend that Germany’s Finance Ministry was studying the impact of a possible Greek default, including a scenario in which the debt-laden country exited the euro zone and reintroduced the drachma.
The news weighed heavily on the euro, which tumbled to a seven-month low against the greenback and hit a 10-year trough against the yen.
The broadly weaker euro boosted euro-denominated gold prices to a fresh record high of EUR1,374.70 a troy ounce earlier, exceeding the previous high of EUR1,369.20 it hit on Friday. Gold priced in Swiss francs also jumped to a record.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gained 0.43% to trade at 78.05, the highest since February 22.
A stronger dollar saps demand for raw materials as an alternative investment and makes metals priced in the currency more expensive in terms of other monies.
Despite the pullback, fears of an imminent credit downgrade of France’s three largest lenders, BNP Paribas, Societe Generale and Credit Agricole, were expected to support prices.
Strong physical demand in India also lent support, as consumers began stepping up purchases of bullion ahead of the gold-buying wedding and festival season due to start in late-September.
Elsewhere on the Comex, silver for December delivery slumped 1.05% to trade at USD41.08 a troy ounce, while copper for December delivery tumbled 2% to trade USD3.925 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,835.95 a troy ounce during late Asian trade, dropping 1.1%.
It earlier fell as much as 1.7% to trade at a daily low of USD1,826.55 a troy ounce.
Germany’s Der Spiegel magazine reported over the weekend that Germany’s Finance Ministry was studying the impact of a possible Greek default, including a scenario in which the debt-laden country exited the euro zone and reintroduced the drachma.
The news weighed heavily on the euro, which tumbled to a seven-month low against the greenback and hit a 10-year trough against the yen.
The broadly weaker euro boosted euro-denominated gold prices to a fresh record high of EUR1,374.70 a troy ounce earlier, exceeding the previous high of EUR1,369.20 it hit on Friday. Gold priced in Swiss francs also jumped to a record.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gained 0.43% to trade at 78.05, the highest since February 22.
A stronger dollar saps demand for raw materials as an alternative investment and makes metals priced in the currency more expensive in terms of other monies.
Despite the pullback, fears of an imminent credit downgrade of France’s three largest lenders, BNP Paribas, Societe Generale and Credit Agricole, were expected to support prices.
Strong physical demand in India also lent support, as consumers began stepping up purchases of bullion ahead of the gold-buying wedding and festival season due to start in late-September.
Elsewhere on the Comex, silver for December delivery slumped 1.05% to trade at USD41.08 a troy ounce, while copper for December delivery tumbled 2% to trade USD3.925 a pound.