Gold retreats as dollar rebounds from steepest weekly drop in two months
Investing.com – Gold prices fell on Monday, pressured by a rebound in the dollar from its steepest weekly drop in two months amid a fall in safe-haven demand after concerns over both geopolitical tensions on the Korean peninsula and Hurricane Irma eased.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange fell by $15.73, or 1.16%, to $1,335.49 a troy ounce.
North Korea marked the 69th anniversary of its founding on Saturday without any further missiles or nuclear tests, easing demand for safe haven assets like gold while lifting sentiment on the greenback.
Dollar-denominated assets such as gold are sensitive to moves in the dollar – A rise in the dollar makes gold more expensive for holders of foreign currency and thus, reduces demand.
Meanwhile, Hurricane Irma was downgraded to a tropical storm much to the relief of market participants some of whom expressed concerns over the impact of the storm on the U.S. economy.
Irma will “create further weakness in indicators that are already softening as the result of the hurricane,” said Michelle Meyer, head of U.S. economics at Bank of America Corp in New York.
The dip in gold prices comes against a surge in buying activity among money managers after net bullish bets on gold rose to 245,300, the highest in nearly twelve-months, according to a report from the Commodity Futures Trading Commission (CFTC) on Friday.