Commodities prices skidded Monday as a strengthening U.S. dollar at least temporarily halted a nearly three-month rally in gold, oil and other raw materials. Gold fell below $800 an ounce.
Gold prices slid in the largest one-day decline since the rally began in mid-August. Many analysts have been calling for a serious correction to gold prices, after the metal piled on nearly $200 an ounce in three months to rise to its highest level since 1980. Falling precious metals prices were accompanied by a rebounding U.S. dollar and sharply lower oil prices.
"It was only a matter of time before you saw a pullback like we're seeing now," said Carlos Sanchez, CPM Group precious metals analyst. "Some of this is profit-taking. Also you're seeing oil prices down around $94 (a barrel), and the dollar has recovered."
An ounce of gold dropped $35.50 to $799.20 an ounce in midday trading on the New York Mercantile Exchange, while silver and platinum prices also tumbled. Gold traded as high as $848 an ounce last week, the highest since gold briefly reached $875 an ounce in January 1980.
Sanchez said he expects more volatility of this magnitude in the months ahead, with gold likely to see $20 to $30 swings more frequently, as investors wrestle with uncertainty. The commodities markets have been buffeted in recent months by the looming threat of inflation on the one hand and, on the other, the concern that economic growth in the U.S. is slowing.
Oil prices retreated on news over the weekend that Saudi Arabia may consider an increase OPEC output of crude oil. The Organization for Petroleum Exporting Countries meets later this week to discuss output quotas for its member nations. The dollar's recovery from its low point last week also pressured energy prices.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment