SAN FRANCISCO: Gold futures settled sharply lower Thursday, tracking a broad commodities selloff to break a seven-session winning streak as prices of crude oil fell more than 4% and the U.S. dollar strengthened.
Gold for August delivery GC1Q -0.16% fell $32.90, or 2.1%,to $1,520.50 an ounce on the Comex division of the New York Mercantile Exchange.It had gained nearly $38 during the winning streak that stretched back to June 14.
The benchmark July silver contract SI1Q -0.35% also sank, off $1.74, or 4.7%, to $35 an ounce. First and foremost, gold is reacting to the sharply higher U.S. dollar index, said Darin Newsom, a senior analyst at Telvent DTN. “Then there is the crude oil selloff. The International Energy Agency said Thursday that it will release 60 million barrels of oil into world markets in the coming month to counteract lost production in Libya. If we are getting 60 million barrels of new crude oil into the global market, then the inflationary story is really taking a beating today, thus gold indirectly gets hit, too, said Richard Hastings, a macro strategist at Global Hunter Securities. August crude fell $3.85, or.4%, to $91.55 a barrel on the New York Mercantile Exchange after tapping a low of $89.69. Read more about oil. Safe-haven buying could emerge in gold soon, with a weaker Dow Jones Industrial Average also providing some support, Newsom said.
Gold investors also gauged comments by the Federal Reserve and lackluster results from a key Chinese manufacturing survey.