Gold extends losses on rising US dollar
Gold fell further on Thursday in response to a firmer US dollar, but record-high crude oil above $123 a barrel was expected to cushion the fall.
Gold dropped to $865.90/866.90 an ounce from $870.85/872.05 an ounce late in New York on Wednesday but that was above last week’s four-month low at $845 an ounce. The metal has lost more than 15% in value since spiking to a lifetime high of $1,030.80 on March 17, mainly driven by profit taking and declines in other commodities. “Given a lack of market direction, cash gold looks to be stabilizing in a range of between $860 and $880 for now,” said Kaname Gokon, deputy general manager at Okato Shoji Co’s research section.
In contrast, buying from users and investors was boosting cash platinum as well as the Tokyo futures, Gokon said. “There are several buy orders for cash platinum lining up at or below $1,900,” he said. The benchmark contract for April 2009 delivery on the Tokyo Commodity Exchange ended the morning session 20 yen per gram higher at 6,355 yen, having hit the daily 300 yen limit up on Wednesday. Spot platinum dipped to $1,945.50/1,965.50 an ounce from $1,949.50/1,969.50 late in New York but it had hit an intraday high of $1,959 an ounce on Thursday.
The euro extended losses to hit a two-month low against the dollar below $1.5300 as weak euro zone retail sales data raised concerns about downside risks to the region’s economy. In theory, a stronger dollar reduces gold’s appeal as an alternative investment to currencies, bonds and stocks. “There maybe a little bit of physical buying. It’s not so great,” said Ronald Leung, director of Lee Cheung Gold Dealers in Hong Kong. “There’s really no direction at all. It is still in the $850 to $880 range for a while, waiting to break either side.”
Gold futures for June delivery GCM8 on the COMEX division of the New York Mercantile Exchange fell $3.7 an ounce to $867.5 an ounce. (Reuters)
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