This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Prices Drop Ahead of G7 Meeting (Update1)

(Updated from 12:32 p.m. ET with closing prices.)

NEW YORK ( TheStreet) -- Gold prices plunged on Monday ahead of this week's Group of Seven meeting.

Gold for April delivery dropped $17.80 to settle at $1,649.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,670.30 and as low as $1,644.10, while the spot price was declining $17.50, according to Kitco's gold index.

"Today [the lower gold price] is the fact that the market's been very much range-bound for a while, funds are still relatively long, with China on holiday there's an absence of physical interest underneath the markets," said James Moore, an analyst at "The funds have taken advantage of some of that, and obviously decided to test the bottom and test the supports."

Silver prices for March delivery fell 53 cents to close at $30.91 an ounce, while the U.S. dollar index was inching up 0.1% to $80.29.

Most major Asian equity indices were shuttered on Monday as investors there took a holiday for the Lunar New Year. It is a weeklong holiday in China, which analysts have said would erode physical demand for the yellow metal this week.

The G7 summit could grab attention from gold traders as reports have said the participating nations may issue a statement about currency exchange rates.

The statement is expected to say that the G7 countries won't engage in unilateral currency devaluation, according to sources cited by Reuters.

The Bank of Japan implemented looser monetary policy two weeks ago, as Prime Minister Shinzo Abe has pushed for more accommodative easing. Following the move, Bank of Japan Gov. Masaaki Shirakawa announced that he would be stepping down sooner than expected, which suggested that Abe may be winning his push for looser policy moving forward.

The Japanese yen, the euro and the U.S. dollar have experienced some swings as a cheapening in the Japanese currency was followed by a speech last week from European Central Bank President Mario Draghi talking down the euro -- a move that may keep the currency's value rising too quickly for inflation.

An inflationary environment is usually seen as a positive for gold.

The gold price also dipped below $1,660 an ounce, which George Gero, a precious metals strategist at RBC Wealth Management, wrote is a key sell-stop level. This, simply, could also be contributing to Monday's heavy selling.

Gold-mining stocks closed mostly lower on Monday. Shares of Yamana Gold (AUY - Get Report) dropped 4.8%, while Agnico-Eagle Mines (AEM - Get Report) slipped 2.8%.

Among volume leaders, Kinross Gold (KGC) sank 2.1%.

Gold ETF SPDR Gold Trust (GLD) lost 1.2%, while iShares Gold Trust (IAU) decreased 1.1%.

-- Written by Joe Deaux in New York.

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GLD $122.07 -0.11%
IAU $12.34 -0.16%
AEM $44.98 2.69%
ABX $17.87 2.35%
AUY $4.50 6.64%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs