US gold futures reversed initial gains to trade lower on Monday after the previous session's sharp rally, hurt by a dollar rise and a retreat in crude oil after last week's rally, dealers said. The August gold contract on COMEX division of New York Mercantile Exchange down 80 cents at $898.20 an ounce at 10:18 am EDT (1418 GMT).
August futures dropped to a session low of $896.60. They peaked at $912.50 - the highest level since May 28. Gold falls on the back of a weaker oil market Monday, after US crude futures soared nearly $11 to end at record $138.54 a barrel on Friday, denting gold's appeal as a hedge against inflation.
Net longs in COMEX gold futures held by non-commercials declined to 170,211 lots for the week to June 3 from 191,512 lots a week ago - US CFTC. COMEX estimated 9 am volume at 49,010 lots. Spot gold at $894.90/895.90 an ounce, compared with $896.80/898.20 in late Friday trade. The London afternoon gold fix at $896.25. July platinum down $33.40, or 1.6 percent, at $2,047.90 an ounce. Spot platinum quoted at $2,035.50/2,055.50. September palladium down 10 cents at $433.70 an ounce.
Spot palladium quoted at $426.50/434.50. July silver futures down 15.0 cents at $17.280 an ounce. Ranged $17.250 to $17.670. Spot silver at $17.22/17.28 an ounce versus the $17.51/17.57 late quote of Friday.
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