Gold prices tumble as dollar rises

A pile of nice shiny gold barsGold prices tumbled to a three-month low on Monday, Sept. 8, as the U.S. dollar hit a 13-month high.

The most actively traded contract, Gold for December delivery, fell to $1,254.30 a troy ounce on the New York Mercantile Exchange, a dip of 1 percent or $13. This is the metal’s lowest close since its June 9 price of $1,254.60.

Gold prices are down approximately 5 percent from a high point in mid-July. On July 10, gold closed at $1,340.60 a troy ounce.

Meanwhile, the dollar hit a six-year high against the yen on Monday at 105.91, a gain of 0.8 percent.

Many investors buy gold to offset dollar weakness, so a stronger dollar puts pressure on gold prices. Rising interest rates, expected by the middle of next year, also lessen the attractiveness of gold as an investment, since it doesn’t offer a yield and costs money to hold.

The gold market also felt technical selling pressure. No significant U.S. economic data was released Monday (in contrast to Friday, when lower-than-expected August jobs numbers edged gold prices slightly higher), so investors were forced to rely on technical indicators and other markets such as the Nymex crude oil market, which hit a seven-month low Monday.

Technical selling is when investors make decisions based on chart indicators, rather than real-world events.

Prices for other precious metals also slid 1 percent, with Silver for December closing at $18,961 a troy ounce and platinum closing at $1,397.50 a troy ounce. These are the lowest closes for the metals since June 4 and Feb. 11, respectively.

“Gold is always going to be a good commodity to buy sell and trade, prices do fluctuate but in the end it is all about buying and selling right,” says Licia Gray, Owner of Cash N Gold. “Now that gold prices are dropping, now is an excellent time to invest.”

Laypeople looking at how to sell gold are more likely to turn to companies that buy gold coins or jewelry. U.S. consumer demand for gold jewelry rose about 13 percent in 2013, but many people choose to sell broken or outdated pieces for a profit.

Gold coin collections can also be lucrative if sold to be melted down.