CHICAGO, Oct. 16 -- Gold futures on the COMEX division of the New York Mercantile Exchange fell for the second straight session Monday, as larger demand for U.S. stocks and the pressure of a higher dollar caused the precious metal to close at its lowest level since mid-September.
The most active gold contract for December delivery sharply fell 22.1 dollars, or 1.26 percent, to settle at 1,737.6 dollars per ounce.
Gold traded as low as 1,729.7 dollars an ounce before recovering slightly to close just below the 1,740 dollar an ounce trading level. That loss came on the heels of a more than ten dollar decline last Friday, meaning that the precious metal has now lost a total of 33 dollars since Thursday.
Pressuring gold Monday was the presence of a stronger dollar for the majority of the trading session. The greenback rose in response to continued uncertainty over the eurozone regarding key meetings Thursday and Friday, as investors sought a safe haven. A higher dollar pressures commodities like gold, as it makes them more expensive to holders of other currencies.
U.S. retail sales rose 1.1 percent in September, igniting a rally in U.S. equities as traders responded to the above- expectation sales numbers. However, this positivity in the U.S. stock market ultimately did not extend to the gold market, as traders saw the precious metal as less appealing than U.S. stocks, and preferred to invest in equities on Monday.
Also buoying U.S. equities was data out of China showing that the country's September exports rose 9.9 percent. Additionally, the Chinese consumer price index rose 1.9 percent in September, a monthly decline from the two percent rise posted in August. Despite gold's loss on the session, some analysts believe the decline in inflation could give China greater leeway to implement economic stimulus measures, which traditionally support gold and could give the precious metal some underlying support.
Silver for December delivery sharply fell 92.6 cents, or 2.75 percent, to close at 32.743 dollars per ounce.