Investing.com - Gold’s slide continued uninterrupted into the fourth quarter on Monday as a resilient dollar pushed the yellow metal to six-week lows and deeper below the $1,200 level, which had been a critical support level for gold bugs.
The dollar, already on a high since the third Fed rate hike for 2018 announced last week, rose further in response to a trade deal reached on Monday by the United States and Canada to replace the North American Free Trade Agreement (NAFTA).
The new United States-Mexico-Canada Agreement (USMCA), incorporating an earlier pact signed between Washington and Mexico City, gives the U.S. access to Canada’s dairy market and caps Canada's auto exports to the U.S., among other things.
Gold futures for December delivery fell 0.27% to $1,193.10 a troy ounce by 2:36 PM ET (18:36 GMT), after settling the session down $4.50 at $1,191.70.
It earlier fell to $1,188.10 in intraday trade, matching an Aug. 15 low. The yellow metal had lost 1.6% in September for its sixth-straight monthly drop, marking its longest losing streak since January 1997.
Gold prices usually decline when the dollar rises, as the precious metal is denominated in the greenback and becomes more expensive for holders of other currencies.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, rose by 0.14% to 94.93. Analysts foresee little in the way of the dollar’s climb after last week’s U.S. rate hike and the Fed’s expectations of more monetary tightening, which will make the currency more attractive to yield-seeking investors.
The Fed added a quarter percentage point on Wednesday to bring U.S. interest rates to a range of 2.00% to 2.25%. The central bank indicated it foresaw another increase in December, followed by three more in 2019 and one in 2020.
Equity markets also rallied in response to the trade deal, putting further pressure on gold as investors switched from safe-havens plays into riskier assets.
Among other precious metals on Comex, silver futures slumped 1.2% to $14.535 a troy ounce, platinum futures rose 0.6% to $827.70 and palladium futures fell 1.9% to $1,053. In base metals, Comex copper lost 0.6% to $2.788 a pound.