Washington: Gold prices fell on Monday as a stronger US dollar and profit taking by investors pushed the metal lower after its recent rally. Silver, which had dropped to a three week low earlier, showed a mild recovery but remained under pressure.
Market analysts said the firm dollar made gold more expensive for buyers using other currencies, reducing demand. At the same time, traders booked profits after gold touched record and near record levels in recent weeks. Higher margin requirements for metal futures contracts also forced some investors to cut their positions, adding to the selling pressure.
Silver prices bounced slightly after sharp losses, but the overall mood in the precious metals market stayed cautious. Platinum and palladium also traded lower, reflecting the wider weakness across the sector.
Despite the short term fall, experts said the long term outlook for gold remains positive. Central bank buying, ongoing global uncertainty and strong investment demand are expected to support prices over time.
For now, traders are watching movements in the dollar and signals on future interest rate policy, which are likely to guide the next direction for gold and silver markets.