Gold Falters Again After 2.5% Drop Last Week

After a week that saw prices drop 2.5%, gold futures fell in electronic trade Monday, failing to inspire hope among gold bugs that there might be a happy ending to a brutal year.

Gold for February delivery GCG4 -0.16%  lost $2.10, or 0.2%, to $1,201.60 an ounce, while March silver SIH4 +0.11%  shed 12 cents, or 0.6%, to $19.34 an ounce.

Gold futures on Friday finished above the closely watched $1,200-an-ounce, clawing back some of their 3%-plus drop to three-year lows in the prior session. But it was the only positive day of the week, as another batch of strong economic data weighed further on prices.

Moudi Raad of Geneva-based financial-services firm MKS said that gold was facing two big hurdles as it tries to recover from a 29% plunge this year.

“The lack of yield that gold provides, as well as its poor price action this year, doesn’t bode well for the coming weeks/months ahead as share prices continue their push higher, whilst inflation is well and truly in check at the moment,” he said, calling the issues “two clear negatives for the yellow metal.”

Elsewhere in metals trading on Monday, January platinum PLF4 +0.38%  was down 20 cents at $1,332 an ounce, while March palladium PAH4 +0.41%   added $1.75, or 0.3%, to $700.50 an ounce.

High-grade copper for March delivery HGH4 +0.06%   was flat at $3.31 a pound.

Source: Moneymarket