NEW YORK (
were slipping Monday as fraud charges against
curbed investor risk appetite.
Gold for June delivery was falling $3.50 to $1,133.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Monday has traded as high as $1,138.50 and as low as $1,124.30. The
was rising 0.26% to $81.04. The spot gold price today was slipping over $3, according to Kitco's gold index.
Ignore Gold's Sell-Off
Securities and Exchange Commission
with fraud which dragged down gold. Prices have been looking to make a move past the $1,160 area to $1,175 an ounce as momentum buying increased gold's appeal as an alternative asset. However, after fraud charges were brought against Goldman, investors lost their risk appetite and dumped all commodities in favor of the
. Worries that more charges could be brought against other banks that participated in mortgage-backed securities as well as the fear of even stricter regulations from Washington kept the gold price lower on Monday.
"Investors appear to be cutting back on riskier assets, including commodities, in the wake of the U.S. government's decision to sue Goldman Sachs," says Anthony Rizzuto, managing director of Dahlman Rose & Co. in his daily metals report. Prices could look to $1,100 as a new support level as many investors keep money on the sidelines to determine if this selloff is part of a deeper correction.
Also weighing on gold prices was China's new rule regulating its real estate market after house prices popped almost 12% in March. China now requires homeowners to put 50% down on second homes and has told banks to stop lending money to homebuyers trying to get a mortgage for their third home. China reported explosive economic growth in the first quarter and investors are expecting the country to restrict money lending even further to curb expansion. Gold prices could see short-term downside if China ends its flow of free money and investors stop buying gold as an alternative asset.The
was down 1 cent to $17.66 while copper prices were losing 2 cents to $3.49.
Mining stocks, a more leveraged way to
, were slipping.
was down 1.15% to $38.66 while
was down 0.42% to $51.93. The company is reportedly in talks to take over
, which previously rejected an $8.45 billion offer from
. Lihir has hired advisors to work out options. The stock was down slightly at $36.20.
Other large-cap miners
were trading down over 1% at $17.52 and $38.44, respectively. Shares of
Freeport McMoRan Copper & Gold
were slipping 2.88% to $78.79.
The popular physically backed ETF,
SPDR Gold Shares
was down 0.22% to $111. Paulson & Co. is the largest holder of GLD and some analysts are worried that if the hedge fund comes under any SEC pressure it may have to unload some of its gold position to store up liquidity.
Written by Alix Steel in New York
Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.