Gold prices on Monday settled lower for a third straight session as a popular gauge of the dollar strengthened to its highest level in more than 17 months, weighing on demand for the precious metal.
December gold GCZ8, +0.09% lost $5.10, or 0.4%, to settle at $1,203.50 an ounce, after posting a drop of 2% last week, falling nearly 1.4% on Friday alone. Monday marked the lowest finish for a most-active contract since Oct. 10, according to FactSet data. Prices for the metal have now posted declines in six out of the last seven trading sessions.
December silver SIZ8, +0.02% shed 12.9 cents, or 0.9%, to $14.011 an ounce, following a decline of 4% last week.
"Gold has fallen in line with the [U.S. dollar] drive, meaning that the current rally in the greenback is not a reflection of a safe-haven spree from traders," said Jameel Ahmad, global head of currency strategy and market research at FXTM, in a daily note. "This does weigh in line with the view that investors are piling up bullish dollar bets, which makes me more suspicious that this move has been encouraged by skepticism that a trade agreement with China can really be agreed in November."
The ICE U.S. Dollar Index DXY, +0.10% a measure of the U.S. currency against six major rivals, was up nearly 0.7% at 97.535 after a high at 97.578, reflecting its highest level since June of 2017, according to FactSet data. The gauge has climbed about 5.9% year to date, partly boosted by expectations for further tightening by the Federal Reserve.
The Fed is expected to raise rates next month and thrice in 2019. Higher interest rates can boost the dollar and dull demand for dollar-denominated commodities.
"Investors are now convinced of another rate hike in couple of weeks, followed by a hawkish 2019," wrote Carlo Alberto De Casa, chief analyst at broker ActivTrades. "This expectation is adding further pressure on the gold price, which has now fallen below the key level of $1,210, mitigating the positive signals of the last few weeks."
In other metals trade, January platinum PLF9, +0.00% fell nearly 1.3% at $845.30 an ounce, while December palladium PAZ8, +0.36% declined by 1.1% to $1,085.60 an ounce. December copper HGZ8, -0.09% meanwhile, shed 0.3% to roughly $2.677 a pound.
Among exchange-traded funds, SPDR Gold Shares GLD, +0.04% was down 0.6% and the iShares Silver Trust SLV, -0.15% lost 0.9%.
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