Gold price drops 2% as haven demand wanes
London (Feb 22) Gold futures on Monday fell hard, as analysts blamed the drop on investors starting out the week with a hankering for stocks and other riskier assets.
Gold futures for April delivery GCJ6, -1.88% slumped $26.80, or 2.2%, to $1,204 an ounce, while March silver SIH6, -1.97% dropped 35 cents, or 2.3%, to $15.03 an ounce.
Gold has fallen “as the week begins in a market environment characterized by higher risk appetite,” said Commerzbank analysts in a note Monday.
U.S. stock futures ESH6, +0.99% have been pointing to a higher open, and European and Asian equities have advanced, with oil also gaining.
Gold futures earlier this month logged their highest settlement in a year. But the Commerzbank analysts, citing CFTC data, said the surge to a 12-month high was “speculatively driven.”
At the same time, the analysts noted that gold ETFs GLD, -0.60% on Friday saw their biggest daily inflow since October 2011. Gold futures ended higher Friday, but registered their first weekly loss in about a month.