Gold Prices Fall; Traders Seek Cash

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"Gold prices lost their luster Friday."

Gold prices lost their luster Friday and were sinking double digits while the Dow Jones Industrial Average also dropped more than 200 points.

Gold for August delivery was slipping $18.40 to $1,189.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Friday has traded as high as $1,210.90 and as low as $1,185.80. The U.S. dollar index was rallying 0.22% to $82.56 while the euro was down 0.05% to $1.29 vs. the dollar. The spot gold price Friday was down more than $19, according to Kitco's gold index.

Investors were broadly selling out of stocks and gold and opting for cash as they digested a slew of economic data and earnings reports.

Stocks had been tentatively higher in morning trading and gold was under modest pressure as investors focused on good news from equities.

Also contributing to gold's downside was a stronger U.S. dollar as traders rushed into cash and treasuries. A stronger currency makes gold, a dollar-backed commodity, more expensive to buy in other currencies.

Some traders are hoping that any gold selloff is short-lived as bargain-hunters look to buy the metal at "discount" prices. "Strong physical demand below the $1,200/oz level, particularly in Asia, is supporting gold in the traditionally weak "summer doldrums" period," says Mark O'Byrne, executive director of GoldCore.

Video: Gold Prices Ready to Rally

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