Forexpros – Gold futures were down for a fourth day on Monday, extending last week’s rout as a margin increase by the CME Group and a stronger U.S. dollar dampened the appeal of the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,584.95 a troy ounce during late Asian trade, tumbling 3.3%.
It earlier fell as much as 6.5% to trade at USD1,533.35 a troy ounce, the lowest price since July 8.
Gold prices are down almost 20% since surging to a record high of USD1,921.05 a troy ounce on September 6.
The CME Group, operator of the Comex raised the amount of cash that traders must deposit for speculative positions, it announced after markets closed on Friday.
The CME increased the so-called initial margin by 21% to USD11,475 per 100-ounce contract from USD9,450, pushing small investors out of the gold market as it raises the cost to trade a futures contract.
The margin for hedging will increase 17% to USD8,500 from USD7,000 per contract, effective as of the close of trading on Monday.
Gold futures sank as much as 8.5% in the two days following the last CME margin hike on August 25.
Meanwhile, fears over a potential Greek default saw the euro fall to an eight-month low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.6% to trade at 79.40, the highest since January 18.
Despite the pullback, gold prices were expected to remain supported amid lingering fears over the sovereign debt crisis in the euro zone and growing concerns over the grim global outlook.
Elsewhere on the Comex, silver for December delivery dropped 3.15% to trade at a ten-month low of USD29.12 a troy ounce, while copper for December delivery plunged 4.93% to trade at a 14-month low of USD3.155 a pound.
The CME increased the initial margin on silver contracts by 16% to USD24,875 per 5,000-ounce contract, while margins on copper contracts rose 18% to USD6,750.
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