Gold Miner Winners & Losers: Yamana

NEW YORK (TheStreet) -- Gold stocks took a pounding Monday as the dollar's spike in value weighed on prices for the yellow metal.

Fundamental selling pressure entered the gold market during the session. One could see it in the spreads between the December and February gold future contracts, said Darin Newsom, the senior commodities analyst at DTN.

Gold futures for December delivery, the most heavily traded contract, lost $13.60 to $1,042.80 on the New York Mercantile Exchange's Comdex. The February contract, meanwhile, fell to $1,044.90.

Another indication of selling pressure: holders of physical gold have evidently been enticed to unload some of their caches, given the metal's historic run above $1,000 through the end of the third quarter. Russia, for instance, took the unusual step of announcing its plan to sell some 20 to 50 tons of bullion this year in order to make up for a budget defecit.

Gold on Hold

"Overall, I'm not reading a lot into this," Newsom said. "Except that there's some nervousness that things might be overdone."

He said that investors and traders increasingly have a sense that commodities prices have rallied to such a degree that values now seem "top heavy."

The dollar, meanwhile, bounced off a 14-week low against the euro; the U.S. Dollar Index, which gauges the value of the greenback relative to six other currencies, staged a big rebound, rising as much as 0.6% after earlier declining by a similar percentage.

More broadly, and with a longer-term view, it looks as though two camps have developed: Those who believe that massive bailout and stimulus spending will eventually cause inflation (and a crumbling dollar), which will render gold even more precious, and those who believe that deflation is the more significant worry, since huge inventories still face all manner of industries, which should keep prices low.