Gold Hits 2-Wk Low After Goldman Fraud Charge

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"[Gold] did fall $20$30, but it has held up relatively well."

Gold fell Monday as news that Goldman Sachs was charged with fraud hurt commodities but lifted the dollar, though it recovered from two-week lows as some investors sought the metal as a haven.

Goldman Sachs was charged on Friday with fraud by the SEC over its marketing of a subprime mortgage product, sparking an immediate slide in assets seen as higher risk (like equities and commodities).

Spot gold hit a two-week low of $1,123.15 and was bid at $1,134 an ounce at 1457 GMT, against $1,136.45 late in New York on Friday.

Commodities tumbled across the board Friday after the news, and most extended those losses on Monday. Oil fell more than 2% and copper slid to three-week lows.

"After prices dropped in a knee-jerk reaction following the (Goldman news), the chart picture for gold deteriorated further," said Eugen Weinberg, an analyst at Commerzbank.

He said gold may be vulnerable to further losses. "The dollar is stronger, (and) gold has been correlated with equities and other commodities positively recently," he said.

U.S. gold futures for June delivery on the COMEX fell to $1,134.50/oz.

Nonetheless, gold has recovered from its earlier lows, as some investors were attracted by the metal's appeal as a safe store of value. "Gold is a safe haven," said Citigroup analyst David Thurtell. "It did fall $20$30, but it has held up relatively well."

Currency effects also weighed on gold, as the dollar .DXY strengthened broadly. Rising risk aversion weighed on higher yielding currencies like the euro, with lingering concerns over Greece's debt levels also pressuring the single currency.

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