NEW YORK (MarketWatch) -- Gold futures fell Monday for the first session in three, moving below $920 an ounce as the U.S. dollar rose, reducing gold's investment appeal.
Gold for April delivery fell $24.20, or 2.6%, to $918.50 an ounce on the Comex division of the New York Mercantile Exchange. Meanwhile, holdings in the largest gold exchange-traded fund fell for the first day in nearly two months.
"Taking more traditional cues from the greenback, gold prices headed lower," wrote Jon Nadler, senior analyst at Kitco Bullion Dealers.
In currencies trading, the dollar rose against most of its major rivals, with the dollar index
(DXY:"Like all markets investors have been hesitant to enter falling market," said Julian Phillips, editor at GoldForecaster.com. Support could come when gold falls below $910, he added.
For now, investors "are still waiting, but it does look like the mood for gold has become more positive."
Gold holdings in SPDR Gold Shares fell 0.3 tons to 1,028.99 tons Friday, moving lower from the record high of $1029.99 tons, according to the latest data from the fund. SPDR Gold
(GLD:
spdr gold trust gold shs
Last: 90.12-2.17-2.35%
1:53pm 03/09/2009
GLD90.12, -2.17, -2.3%) fell 2.2% to $90.30.
Gold had gained 4% in the previous two sessions, boosted by safe-haven buying amid growing evidence that troubles in the world economy were deepening. Despite Monday's loss, flight to safety could raise gold prices again, analysts said.
"Given the continued weakness of equities, investors may again look towards safe-haven asset types, particularly gold," wrote James Moore, a precious metals analyst at TheBullionDesk.com. He said he expected the metal to set a new high above $1,030 during the first half of the year.
The April gold contract has gained about 4% this year.