Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures dropped almost $36 an ounce Monday to finish at their lowest level in more than three weeks, as investors sold gold in a scramble for cash as the potential for a Greek bond default pressured U.S. stocks and helped provide a lift to the U.S. dollar. The session�s action is "reflective of a �risk off� day,� said Brien Lundin, editor of Gold Newsletter. �Greece is back in the headlines, and the market is beginning to accept the inevitability of a default, which has prompted speculators to close positions and run for safety,� he said.

Gold for December delivery fell $35.80, or 2%, to settle at $1,778.90 an ounce on the Comex division of the New York Mercantile Exchange Monday. The contract, which had lost as much as $43.70 to touch a low of $1,771, marked its lowest closing level since Aug. 25. Gold futures continued lower in electronic trading on Globex before reversing higher. Unfortunately, because �speculators had poured money back into gold recently, this safe haven had temporarily transformed into a speculative trade because of the hot money that had come into it,� said Lundin, in emailed comments. �That money�s coming out now.� The decline in gold came as U.S. stocks dropped on fears that Greece is heading toward a default. The Dow Jones Industrial Average was down more than 200 points. See full story.