Gold Drops as Safe Haven Demand Subsides

Gold futures on Monday fell hard, as analysts blamed the drop on investors starting out the week with a hankering for stocks and other riskier assets.

Gold futures for April delivery  slumped $26.80, or 2.2%, to $1,204 an ounce, while March silver  dropped 35 cents, or 2.3%, to $15.03 an ounce.

Gold has fallen “as the week begins in a market environment characterized by higher risk appetite,” said Commerzbank analysts in a note Monday.

U.S. stock futures  have been pointing to a higher open, and European and Asian equities have advanced, with oil also gaining.

Gold futures earlier this month logged their highest settlement in a year. But the Commerzbank analysts, citing CFTC data, said the surge to a 12-month high was “speculatively driven.”

At the same time, the analysts noted that gold ETFs on Friday saw their biggest daily inflow since October 2011. Gold futures ended higher Friday, but registered their first weekly loss in about a month.

via MarketWatch

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza