Gold futures slump further below $1,600 mark
By Polya Lesova and Kim Hjelmgaard,
NEW YORK (MarketWatch) — Gold futures fell sharply Monday, as investors flocked for the safety of the U.S. dollar amid deepening worries over Greece’s political turmoil and position in the euro zone.
Gold for June delivery GCM2 -1.45% slumped $24.80 to $1,559.20 an ounce on the Comex division of the New York Mercantile Exchange.
The precious metal settled at its lowest level this year on Friday.
“The firm U.S. dollar is weighing on the mood of market players now that crisis-ridden Greece is likely to face new elections,” said analysts at Commerzbank AG in a note to clients.
Talks between potential coalition partners on setting up a new government in Greece collapsed Sunday, raising the likelihood of fresh elections and stirring fears about the future of the euro zone.Read more about Greece's political turmoil.
Also contributing to Monday’s nervousness in Europe, yields leapt on benchmark government bonds in Spain and Italy.
Against this uncertain backdrop, the dollar continued its climb. The ICE dollar index DXY +0.37% , which measures the U.S. unit against a basket of six other currencies, lately stood at 80.607, up from 80.250 late Friday.
A stronger greenback tends to weigh on dollar-priced commodities such as gold, as it makes them more expensive for holders of other currencies.
Meanwhile, metals futures tracked broadly lower, with copper the leading latest pullback.
Copper for July delivery HGN2 -2.08% fell 7 cents, or 2%, to $3.58 a pound. July silver SIN2 -1.19% declined 46 cents, or 1.6%, to $28.43 an ounce.
July platinum PLN2 -1.39% traded down 1.5%, surrendering %21.50 to 1,449.90 an ounce, while the June contract for sister metal palladium PAM2 -0.23% fell $7.40, or 1.2%, to $596.00 an ounce.