Gold fell, paring gains from the biggest one-day rally in more than a year, as a stronger dollar curbed demand for the metal as a protection of wealth. Silver and platinum dropped.
The Bloomberg Dollar Spot Index rose for the third time in four days, extending gains before employment data this week that analysts said will show the U.S. economy added more than 200,000 jobs for the 10th consecutive month in November. Lower oil prices also weighed on gold prices amid concerns about deflation.
“If the dollar holds on to its recent gains, gold is likely to face headwinds ahead,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a note today.
Gold for February delivery dropped 1.9 percent to $1,195.10 an ounce by 7:18 a.m. on the Comex in New York. Bullion for immediate delivery slipped 1.4 percent to $1,195.50 in London, according to Bloomberg generic pricing.
The metal jumped 3.6 percent yesterday, reaching a one-month high. It rebounded as crude oil reversed a drop to the lowest in five years and as some investors closed out bets on lower prices.