Gold prices retreat from record levels
Gold falls below $800 on profit-taking and a stronger dollar; price settles higher.
NEW YORK (CNNMoney.com) -- Gold futures fell Monday as the dollar rebounded and traders locked in profits after last week's highs.
Gold was down $34.80 at one point today, then rose to settle at $807.70 on the New York Mercantile Exchange.
Gold rallied last week as the euro gained against the dollar and oil prices surged. Investors seeking safety in the commodities market drove the price of gold to a record high of $834.70 on Friday.
Now, as the dollar begins to recover and oil prices slip, gold traders are selling off to book profits.
"Traders are quick to exit the market on the first sign of a loss of momentum," said Peter Spina, president of Gold Seek LLC. However, Spina added that he doesn't think today's sell off is, "going to be something that changes the market, the fundamentals are still in place."
Commodities like gold tend to benefit from volatility in the financial sector since they are perceived as a safe-haven investment. Conversely, if the economy shows signs of improvement, gold prices fall as investors favor more high-risk, high-return investments.
Carlos Sanchez, a precious metals analyst at CPM Group, says today's sell off is not surprising, since gold prices "rose very high, very quickly." He added that gold has been supported recently by speculative buying and that "profit taking at high levels" is to be expected.
However, Sanchez added that he expects gold to continue its upward trend, since the financial markets remain volatile. "We're not out of the woods yet," he said.