Gold prices fell Monday in U.S. futures trading as the dollar strengthened, oil fell and investors sold gold assets to cover losses in the stock market.
Both a rising U.S. dollar -- which reached its highest level against a basket of six major currencies in half a year -- and falling crude oil prices tend to weigh on gold prices, which hit a high of $1,923.10 per ounce last week.
Besides the dollar and crude oil, investors went to their gold assets to cover heavy losses in stocks. The DAX 30 was down 3.9 percent and the FTSE 100 was off 2.6 percent, both of which were down on a growing sense among some observers that Greece must either default or leave the euro zone or both.
People always assume that gold does well in times of crisis, but that is not necessarily the case, Standard Chartered analyst Dan Smith told Reuters, citing gold's 28 percent drop from the highs of 2008 to the lows of that year.
Gold is held as part of a wider portfolio of assets, so when you see blanket selling of equities, then gold will come down at the same time. Having said that, of course, it has tended to do well on worries about Europe and currency strength, but the wider picture needs to be taken into account, so that is why gold is struggling at these higher levels.
Gold in New York futures trading fell from $1,859.50 per ounce to $1,845.50.
Gold for immediate delivery fell $18.91 to $1,843.91.