Gold fell as the dollar strengthened against the euro, eroding the metal’s appeal as an alternative investment.
European Central Bank President Mario Draghi said that substantial risks to the economy remain, and the euro dropped as much as 0.5 percent. Gold has slumped 17 percent from a record $1,923.70 an ounce on Sept. 6, while the euro dropped 7 percent against the greenback.
“The dollar has moved positive on the day, impacting gold,” Scott Gardner, the chief investment officer at Verdmont Capital SA in Panama, said in an e-mail. “It will take some time for investors to regain confidence in gold as a crisis hedge, given the magnitude of the recent shakeout.”
Gold futures for February delivery fell 0.1 percent to settle at $1,596.70 at 1:59 p.m. on the Comex in New York. Last week, the metal dropped 6.9 percent, the most since the week ended Sept. 23. Bullion has climbed 12 percent this year.
“Gold suffered from a renewed rush for dollar liquidity, but in the long run, its outlook remains solid,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report. “Accommodative monetary policy across the globe will continue to secure gold’s inflation hedge role.”
Silver futures for March delivery fell 2.7 percent to $28.874 an ounce. The metal dropped 8 percent last week and has lost 6.7 percent this year.
Platinum futures for January delivery fell 0.3 percent to close at $1,413.60 an ounce on the New York Mercantile Exchange. The price declined 6.5 percent last week.
Palladium futures for March delivery declined 1.3 percent to $617.70 an ounce, after tumbling 8.9 percent last week.
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