Forexpros – Gold prices fell Monday, as investors decided they had enough with last week’s dollar sales and stocked up on the greenback, gold’s traditional hedge.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,597.35 a troy ounce on Monday, down 0.03%.
Gold futures were likely to test support at USD1,577.45 a troy ounce, Friday’s low, and resistance at USD1,607.35, Monday’s high.
Gold prices have taken a beating recently on fears that the European debt crisis may be getting worse, which has sent investors running to the dollar as a safe haven.
Gold often falls when the dollar strengthens.
On Friday, however, the market viewed the precious metal as oversold, which brought in the bottom-fishers.
But also on Friday, Fitch Ratings said it revised France’s rating outlook and put six other eurozone members on review for a downgrade on the grounds that a “comprehensive solution” to the crisis is “technically and politically beyond reach.”
While France still carries its AAA rating, yet the revision to its outlook means a downgrade is now possible.
The move revived fears that the eurozone crisis rages on while the U.S. is moving ahead even if at a sluggish pace.
Elsewhere on the Comex, silver futures for March delivery were down 1.18% and trading at USD29.322 a troy ounce, while copper futures for March were down 1.51% at USD3.312 a pound.
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