Gold extends its losing streak to a fourth session
Bullion prices ended lower at Comex on Monday, 15 December 2014. Gold extended its losing streak to a fourth session on Monday pressured by lower crude oil prices and a higher U.S. dollar index on this day.
Gold for February delivery dropped 14.80 points, or 1.2%, to settle at $1,207.70 an ounce, while March silver sank 49 cents, or 2.9%, to $16.56 an ounce.
Oil succumbed to increasing selling pressure as an official from the Organization of the Petroleum Exporting Countries indicated that the cartel had no intention of cutting oil production in order to lift sagging crude oil prices. Gold and oil prices have been moving in tandem recently with gold taking its cue from the oil market more frequently.
On the economic front, the Empire State index showed the first negative reading since January 2013, while industrial production rose 1.3% in November, the biggest increase since May 2010. NAHB builder sentiment is also expected and housing starts are due out on Tuesday.
The U.S. dollar index was firmer on Monday and hovering not far below its recent four-year high. The stronger greenback the past few months has been a bearish underlying factor for the raw commodity sector. Most raw commodities, including precious metals, are priced in U.S. dollars on the world markets. When the greenback appreciates in value against the other currencies, it makes those commodities more expensive to purchase. Read that less demand.
In overnight news, Japanese Prime Minister Shinzo Abe saw an election victory on Sunday, which was not unexpected. After his victory, Abe said he would continue on his path to boost the presently moribund Japanese economy.
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Traders and investors are looking ahead to this week's Federal Reserve Open Market Committee (FOMC) meeting to discuss U.S. monetary policy. Many believe the Fed meeting will slightly change statement wording to favor the monetary policy hawks. The FOMC could also further elaborate on a timeline for raising interest rates. The Fed has not raised interest rates in six years.
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