Gold futures were under $900 for the second straight session Monday as investors remained more upbeat on the global economic outlook and a bit less inclined to seek the safety of precious metals. The most actively traded contract was June, which was giving up $19 to $877.50 an ounce at the Comex division of the New York Mercantile Exchange. Silver prices were slipping 28 cents to $12.44 an ounce, and copper prices ticked down to $1.95 a pound. Investors are wary as the first-quarter earnings season begins, but the overall global sentiment is positive with hopes that the worst might be over.
" We've seen a situation in the last three or four weeks where there is optimism with the world economy. Our expectation has been once we got beyond the April delivery process that we would see the price come off. We thought it could go down to $860 or so," says Jeffrey Christian, managing director of CPM Group. The current decline in gold could be short term as big players who were burned by the markets in 2008 and who want to increase their holdings look to get back in to the metal. Over the last two months, there has been no demand from India and the Middle East. Christian believes "they are expected to come back in once the prices come off some." He speculates that $880 could be the base, but that gold could fall as low as $860 an ounce.