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Gold futures fall below $1,200 on U.S. dollar strength

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Investing.com -

Investing.com - Gold prices fell below the $1,200-level on Monday, as traders continued to monitor the direction of the U.S. dollar to gauge the appeal of the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery shed $7.50, or 0.62%, to trade at $1,195.60 a troy ounce during U.S. morning hours.

Futures were likely to find support at $1,183.50, the low from April 14, and resistance at $1,215.90, the high from April 7.

The dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.55% to trade at 98.15 early on Monday.

A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

The index lost 1.9% last week amid speculation the Federal Reserve could delay hiking interest rates until late 2015, instead of tightening midyear, after a recent run of soft economic data dampened optimism on the recovery.

Elsewhere on the Comex, silver futures for May delivery dropped 25.2 cents, or 1.55%, to trade at $15.97 a troy ounce, while copper for May delivery slumped 4.3 cents, or 1.54%, to trade at $2.731 a pound.

The People's Bank of China lowered the amount of deposits it requires banks to hold as reserves to 18.5% from 19.5%, it announced on Sunday.

The move came after official data last week showed that China's economy grew 7.0% in the first quarter, the slowest pace of growth since the global financial crisis in 2008.

Data on industrial production, retail sales and fixed asset investment also fell short of forecasts, indicating that China needs to act to prevent a further slowdown in the economy.

China is the world's largest copper consumer, accounting for almost 40% of world consumption.

Meanwhile, concerns over the lack of an agreement on economic reforms for bailout funds between Greece and its creditors remained in focus, fuelling fears that the debt-strapped nation could be forced out of the euro zone.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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