Metals prices were hitting the skids Monday as traders got the jitters from falling stock market indices and a strengthening dollar.
Contracts for gold bullion were shedding $12.50 at $755.90 an ounce in recent trading on the Comex division of the New York Mercantile Exchange.
Gold had traded as low as $749 before recovering somewhat.
The stock market selloff, which started Friday in New York, continued as Asian trading began early Monday and came full circle through London and Frankfurt to prompt even further losses in the U.S. again. In the wake of the drop, the U.S. dollar firmed and hurt gold, the value of which tends to move down as the greenback appreciates.
"I see this as long overdue consolidation," says Julian Phillips, editor of the
Gold Forecaster -- Global Watch
newsletter in Johannesburg. "The strength of the dollar has softened people's desire to buy gold."
He also notes that the $750 an ounce level is proving to be something of a psychological barrier to buyers of physical metal in India. Other analysts agree that the recent spike in gold prices, which have shot up from around $668 at the very end of August, as rather long-in-the-tooth.
"It's extremely overbought," says Rich Ishida, president of California-based research firm MarketVane. He says the next level of technical support for prices should kick in at around $742.40, but he doesn't rule out a drop to $700 in the near term.
Elsewhere in the metals markets, silver futures were sliding 9 cents at $13.55 an ounce, while copper was lower by 7 cents at $3.48 a pound. Platinum spot prices were off $10 at $1,431 an ounce.