Gold ends lower under $1,170 as dollar surges
New York (Nov 3) Gold fell on Monday to near a recent four-year low as the dollar index rose to its highest since mid-2010 on speculation that the U.S. Federal Reserve will act before other major central banks to tighten monetary policy.
Silver prices also tumbled, with the metal touching its lowest since March 2010 at $15.72 an ounce and its cheapest level compared to gold in more than five years.
Spot gold was last down 0.3 percent near $1,168 an ounce, while U.S. gold futures for December delivery ended down $1.80 at $1,169.80. Strength in the U.S. dollar knocked gold below key support at $1,180 an ounce on Friday, sparking a wave of selling that took prices as low as $1,161.25 an ounce.
"(Fresh buying) is very difficult to imagine, given the outlook for the U.S. dollar, which is weighing on the gold price in addition to technical selling," Commerzbank analyst Eugen Weinberg said.
"There are very few fundamental factors which could ignite a turnaround in gold's fortunes, so at the moment it seems to be under further pressure," he said.
The U.S. unit hit a seven-year peak against the yen and a two-year high against the euro after the Bank of Japan opted to boost its already massive bond-buying stimulus last week, and due to market talk of further easing from the European Central Bank when it meets later this week.
That pushed the dollar index, which measures the U.S. unit's performance against a basket of currencies, to a four-year high. The contrast between a raft of relatively upbeat data from the United States and weaker readings on growth from other economies have boosted expectations that U.S. monetary policy will tighten more quickly than elsewhere.