Updated from 11:39 a.m. EST
Gold slid again Monday as investors scrambled to raise cash while stock indices slid across the globe.
Contracts for April delivery of gold dipped $4.90 to close at $639.20 an ounce on the Comex division of the New York Mercantile Exchange. Those exchange-traded funds that hold bars of bullion were retreating also, with
streetTracks Gold Shares
iShares Comex Gold Trust
both lower by 0.8%.
Asian markets kicked off the week sharply lower with major indices down in Tokyo, Hong Kong and Singapore. The downdraft continued as the European and North American markets successively opened.
The effect on gold was another soft session as stock investors hurried to find cash for margin calls and so liquidated futures holdings, such as gold. But at least one observer believes that the worst effects could be over for the yellow metal.
"Most of the liquidation that needed to get done has probably been effected," says Dennis Gartman, editor of
The Gartman Letter
, adding that at current levels the price could provide a good opportunity to start layering in buy orders.
Early in the session prices fell as low as $635.20 before rebounding somewhat, helped no doubt by midsession strength in the
Dow Jones Industrial Average
, which recently was up about 18 points at 12,132, after opening down.
Gold now rests right on top of long-term price trend lines, which should provide some steady technical support, so long as oil prices don't come tumbling down, Gartman says.
Oil is viewed as a primary driver of inflation, and some investors buy gold as a hedge against a generally rising price level. So when oil dips, gold sometimes follows suit. Crude futures were recently off about 2% in late-session trading at $60 a barrel.
Also out in early trading was a report showing a weaker-than-expected services sector in the U.S, as measured by the Institute for Supply Management's nonmanufacturing index. However, in the grand scheme of things, the data were still robust.
a forward-looking measure and new export orders provide an indication of the solid underlying condition of the service sector," writes Joe Brusuelas, chief U.S. economist at IDEAglobal in New York.
Foreign exchange dealers gave a mixed reaction. The dollar was buying 115.827 yen, down from 116.85 yen late Friday. The euro was buying $1.3094, down from $1.3194 previously. The price of gold and the dollar tend to move in opposite directions.
Among the miners, CIBC World Markets dinged shares of
with a downgrade to sector underperform from sector perform. The shares were recently lower by 1.3%.
Elsewhere, the Philadelphia Gold and Silver Index was drooping 1.2%. Bucking the sector's softness were shares of
, up 1% recently.
As for base metals, copper closed 4 cents lower, at $2.67 a pound on the Comex.