Gold prices dropped over 2% Monday, settling below the psychologically important level of $1,500 to post their lowest finish in two months, as strength in U.S. dollar and some buoyancy in U.S. stocks and yields drew demand away from bullion.
"Naturally, a strong U.S. dollar is a headwind for gold priced in U.S. dollars," said Michael Armbruster, managing partner at Altavest.
"However, technical considerations may be more influential on today's action in the gold market," he said. "Gold has formed a bearish head-and-shoulders pattern, and today's drop below the formation's 'neckline' has likely spurred additional selling."
"In the short-run, gold could follow through to lower levels on a purely technical basis," Armbruster said, though long-term prospects remain bullish for gold based on easy money central bank policies."
Gold for December delivery GCZ19, -0.23% on Comex declined $33.50, or 2.2%, to settle at $1,472.90 an ounce-the lowest finish for a the most-active since contract since Aug. 2, according to FactSet data. For the month, the contract declined 3.7%, but gained 3.4% over the past three months.
December silver SIZ19, +0.19% lost 65.4 cents, or 3.7%, to end at $16.998 an ounce-the contract's first finish below $17 since early August. It lost more than 7% in September, but gained over 10% for the quarter.
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The recent softness in precious metals has come as the dollar has been firming, amid weakness in global currencies, including the euro EURUSD, +0.0640% and the British pound GBPUSD, -0.0731%.
Read: Like it or not, the U.S. dollar is cementing its role as a global safe haven
The ICE U.S. Dollar Index DXY, -0.02%, which tracks the currency against a half dozen rivals, was around its highest level since roughly April of 2017, according to FactSet data. On top of that, U.S. stocks gained and bond yields, which compete with gold for haven demand, also were trending higher. The 10-year Treasury note TMUBMUSD10Y, +0.84% yielded around as of 1.685% in Monday dealings.
In other metals trading, December copper HGZ19, +0.51% shed 0.7% to $2.5785 a pound, for a monthly gain of 1%, though prices were over 5% lower for the quarter.
January platinum PLF20, -0.38% settled at $889.20 an ounce, down 5% on Monday, with the most-active contract losing around 5% for the month, though it finished over 4% higher for the quarter. December palladium PAZ19, +0.06% fell 0.3% to $1,647.50 an ounce-up about 7% for the month, for a quarterly gain of 7.5%.