Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures fell Monday morning to their lowest level in three weeks and appeared set to suffer their fourth-straight loss, with a stronger U.S. dollar and a weaker stock market applying pressure.

"Perhaps the most damaging outside influence is the fact that world equity markets are under pressure again, as that seems to foster a slower growth expectation. [That] in turn downplays inflation and undermines physical and investment demand for gold," Nell Sloane, an analyst at NSFutures.com said in daily commentary.

Meanwhile, the U.S. dollar was up 0.5% against the yen at 112.22, and reached a two-week high of 112.94 in overnight trading. The buck was 0.2% better versus the euro at $1.2787.

Gold, which is denominated in dollars, is widely viewed as a hedge against an increase in inflation, while a rising dollar is seen as helping contain inflation.

Against this backdrop, gold for June delivery fell to a low of $643.50 an ounce on the New York Mercantile Exchange, an intraday level the contract hasn't seen since April 28. Prices were last down $5, or 0.8%, at $652.50 an ounce.

The front-month contract had lost $35.40 an ounce over the previous three sessions and had dropped $64 an ounce since closing at a 26-year high $721.50 on May 11. Read more.

"Despite some speculating [that] the bull run for gold is over, in my view there are still far too many factors in favor of being long gold, with $850 remaining a realistic target for later in the year as investment demand continues to swell prices," James Moore, an analyst at TheBullionDesk.com, said in a note to clients.

Elsewhere in metals trading Monday, July silver was at $12.39 an ounce, up 3 cents, after a decline to a low of $12.21. July copper slumped 2.9 cents, or 0.8%, to $3.44 a pound.

July platinum shed $29.40, or 2.2%, to $1,284 an ounce, and June palladium dropped $14.30, or 4.1%, to $337.50 an ounce.

Indexes suffer steep declines