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Gold slides more than 1% as dollar firms up
Gold slid more than one per cent on Tuesday as oil prices shed more than $6 a barrel and as the dollar firmed after comments from Federal Reserve chairman Ben Bernanke.
- Reuters
- Published: 00:07 July 9, 2008
London: Gold slid more than one per cent on Tuesday as oil prices shed more than $6 a barrel and as the dollar firmed after comments from Federal Reserve chairman Ben Bernanke.
Spot gold fell to $914.20/915.20 an ounce at 1505 GMT from $925.15/926.35 an ounce late in New York on Monday. Earlier it touched a session low of $912.50.
The precious metal edged up a touch earlier in the session as the financial markets wilted, spurring buying of the precious metal as an alternative investment.
However, the fact they did not react more to stock market weakness undermined positive sentiment.
"I would have expected gold to have done better earlier on, and it failed to," said HSBC analyst James Steel.
"Given that, the fact that the oil market resumed its decline and the dollar, which was weaker at the time, has rallied, was more than enough to knock gold even lower."
Dent in interest
Weaker oil prices are denting interest in gold as an inflation hedge and undermining confidence in commodities as a whole.
Crude slipped more than $5 a barrel to its lowest level in almost two weeks after reports said an Atlantic hurricane it was feared would hit the Gulf of Mexico was forecast to miss oil facilities there.
The dollar also firmed after Bernanke said the Fed may keep an emergency lending facility for major Wall Street firms open beyond the end of the year.
Gold typically moves in the opposite direction to the dollar, as it is bought as a hedge against weakness in the US currency.
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