NEW YORK (
were headed lower Monday as investors took profits after gold rallied almost 4% last week.
Gold for February delivery was down $9.20 at $1,742.10 an ounce at the Comex division of the New York Mercantile Exchange. The
has traded as high as $1,758.80 and as low as $1,732.20 an ounce while the spot price was down $6, according to Kitco's gold index.
were adding 17 cents at $32.86 an ounce while the
U.S. dollar index
was down 0.56% at $78.24.
Gold was also decoupling from the stock market -- the two have been moving in tandem of late. Any sell off in stocks can prompt gold selling as investors need to raise cash. On the flip side, if markets head higher and traders still need cash they might be more apt to sell gold then a stock up 10%.
There was steady buying from Asia overnight and Western traders took advantage of the price move to lock in gains and are tentative to bet big on gold.
The latest commitment of traders report for the week ended November 29th showed that total long positions decreased by 28,000 contracts and short positions sunk 21,000 contracts. This means that part of gold's recent rally was short covering, which was then countered by investors exiting out of some of their long exposure.
"Speculative financial investors are still showing reticence," wrote CommerzBank. Still, gold prices this week will still be shaped by the sovereign debt crisis in Europe said CommerzBank.
There are many reports swirling about major financial initiatives to help stabilize Europe. European central banks, through the European Central Bank, could lend up to 200 billion euros to the International Monetary Fund, which could then lend that money back to weaker European governments. The Federal Reserve could also be prepping to lend more money to the International Monetary Fund along with the ECB. The ECB could also be lining up 1 trillion eruos to buy sovereign bonds if deeper fiscal consolidation among the 17 nations on the euro is agreed upon.