Gold fell to a two-week low as the dollar rose amid concern that the crisis in Spain is worsening, crimping demand for the metal as an alternative investment.
The dollar gained for the third straight day against a basket of six currencies as clashes in Madrid preceded a general strike in Athens to protest austerity measures at the center of Europe’s financial crisis. The Bank of Spain said the economy kept falling at a “significant pace” in the third quarter. Gold has climbed 9.3 percent this quarter, partly on speculation that Europe’s leaders would be able to stem the region’s fiscal woes.
“Global anxieties surrounding Europe are flaring up, and we are seeing a flight to cash,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “People are in a risk-off mode today.”
Gold futures for December delivery retreated 0.7 percent to settle at $1,753.60 an ounce at 1:49 p.m. on the Comex in New York, after earlier dropping to $1,738.30, the lowest for a most-active contract since Sept. 13. The price is up 12 percent this year.
The Standard & Poor’s GSCI Spot Index of 24 raw materials fell as much as 1.8 percent to 646.7, the lowest since Aug. 6.
Silver futures for December delivery fell less than 0.1 percent to $33.94 an ounce in New York. Prices are down for the fourth consecutive session, the longest slump since May 16. The metal is still up 23 percent this quarter, heading for biggest gain since Dec. 31, 2010.
On the New York Mercantile Exchange, platinum futures for January delivery rose 0.2 percent to $1,639.20 an ounce. Palladium futures for December delivery dropped 2.3 percent to $625.85 an ounce.
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