By Myra P. Saefong, MarketWatch
TOKYO (MarketWatch) -- Gold futures dropped by as much as $12 an ounce in electronic trading Wednesday in Asia, as further strength in the U.S. dollar weighed on the precious metal.
Gold for December delivery fell to a low of $1,130.30 an ounce on Globex, recovering slightly to $1,132.10, down $10.70 by the afternoon in Tokyo.
"For the first time in past three months, gold has had a successive lower close for three consecutive days," said Chintan Karnani, an analyst at Insignia Consultants in New Delhi.
"This is a short-term bearish signal for gold," he said, adding that if the trend continues into Friday, the market may see prices fall to $1,071 in the near term.
Gold prices need to trade over $1,108 to be in what he calls a "bullish zone."
Still, there will be "value-based investing at lower prices," he said.
December gold had dropped $20.40 Tuesday on the Comex division of the New York Mercantile Exchange to end at $1,142.80. The retreat marked a third day of losses to tally a 6% decline since Thursday, when prices hit a record high above $1,226.
"Rising commodity prices over the last six months have been the beacon of the economic recovery, but renewed strength in the [U.S. dollar] is taking the gloss off metals prices and causing investors to question the underlying strength of the recovery we have seen to date," said Cameron Peacock, a market analyst at IG Markets in Melbourne.
"This is clearly evident by selling we have seen across the commodity space in recent days," he said.
The Dollar Index (DXY 76.13, -0.18, -0.24%) touched its highest level in five weeks Tuesday.
Wednesday afternoon in Asia, mining stocks were broadly lower. Shares of Lihir Gold Ltd. (AU:LGL 3.27, -0.08, -2.38%) (LIHRF 3.12, -0.23, -6.87%) were down 2.4% in Sydney.
