Gold futures dropped on Monday, weighed down by a dip in crude oil prices and a strengthening U.S. dampening investors demand for the precious metal.
Gold futures ended down $3.40 an ounce on Friday, but the benchmark contract calculated a weekly gain of $23, or about 2.7 percent. Gold for February delivery fell $4 to $861.70 an ounce on the New York Mercantile Exchange. A higher dollar makes gold, which is denominated in the U.S. currency, more
expensive for investors holding other currencies.
The dollar rose against most major counterparts, as investors covered short positions taken after last Friday's dismal report on U.S. payrolls data. The dollar index, which tracks the performance of the greenback against a basket of other currencies, gained 0.6 percent to 76.210.
Given the recent surge in metal prices, a period of consolidation is healthy for the longevity of the current bull-trend, said James Moore, an analyst at TheBullionDesk.com, in a research note.
With little improvement in the health of the U.S. economy, interest rates still forecast to move lower, record oil prices creating inflationary pressure and little improvement in the geopolitical climate, gold should remain in a strong mood and look to challenge $900 an ounce during the first quarter, Moore said.
Also on the Nymex, March silver dropped 12.20 cents to $15.340 an ounce, and March palladium dropped $3.85 to $373.90 an ounce, but January platinum gained $3.80 to $1,542.90 an ounce.
March copper declined 1.75 cents to $3.14 a pound