Gold Prices Slump Further On Lack Of Demand

SARA LEPRO

NEW YORK (AP) — Gold prices extended their decline Monday, falling to their lowest close in more than two months amid a lack of demand.

Energy futures also fell, while grain prices were relatively flat.

Gold prices have been suffering amid increased risk appetite on Wall Street and signs of strength in the dollar. The Dow Jones industrial average has rallied more than 22 percent since the beginning of March on an increasing number of better than-expected readings on the economy.

Though stocks pulled back on Monday, the selling was not intense enough to spook investors and drive up demand for gold, considered a safe-haven asset.

"Investment demand has been lagging for at least two months. It's been fairly tepid overall," said Tom Pawlicki, commodities analyst with MF Global Research in Chicago.

Gold prices were also tampered by the U.S. dollar on Monday, which showed some strength late in the session against the euro and the British pound. Gold tends to trade inversely with the dollar, as the precious metal is used as a hedge against inflation, which can be triggered by a weak greenback.