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Gold futures plunged more than $9 an ounce on Monday as a drop in energy costs lowered the investment appeal of the precious metal as a hedge against inflation, pushing gold to its lowest level in nearly six weeks.
Gold futures for December delivery fell $9.60, or 1 percent, to $907.90 an ounce on the Comex division of the New York Mercantile Exchange. The contract fell 2.1 percent last week, making it the third straight decline since June 25.
Prices continued lower for the contract in electronic trading on Globex, and were last at $904.80 as of 2 p.m. EDT.
Crude-oil futures fell as much as 4.5 percent to $119.50 a barrel, a 19 percent plunge from a record on July 11.
"Gold has now decisively stepped into sub-$900 territory as crumbling oil values and fears of a nearer-term Fed response to the rising inflationary pressures bolstered a dollar which had already looked predisposed for incremental gains," said Jon Nadler, a senior analyst at Kitco Bullion Dealers.
"Analysts who had foreseen a decoupling by gold from crude oil got a rude awakening today when black gold dipped to under $120 and augmented the slide in various commodities," he said in emailed comments.
And "as the U.S. dollar really did not do much ahead of tomorrow's Fed meeting (anticipating no change in stance by the central bank) today's slippage is clearly (in most part) attributable to the goings-on in oil," he said.
Also on the Nymex, Silver futures for September delivery declined 38 cents, or 2.2 percent, to $17.14 an ounce. Silver has gained 15 percent this year, while gold advanced 8.3 percent.
October platinum dropped $92.30 to close at $1,563 an ounce. September palladium fell $16.65 to finish at $354.45 an ounce and September copper futures dropped 13.9 cents, or 3.9 percent, to $3.44 a pound.
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