Business | Markets
Gold falls as dollar extends gains
Gold fell on Tuesday as the dollar extended gains against the euro after US inflation data came in higher than expected, while platinum held just off an 11-month low of $1,296.50 hit in Asian trade.
- Reuters
- Published: 23:32 August 19, 2008
London: Gold fell on Tuesday as the dollar extended gains against the euro after US inflation data came in higher than expected, while platinum held just off an 11-month low of $1,296.50 hit in Asian trade.
Gold was at $790.50/$791.50 an ounce at 1335 GMT against $799.65/$801.05 late in New York, having earlier hit a session low of $782.05.
Despite the pick-up in the dollar, the precious metal ran into good technical support at $775 an ounce, analysts say, while demand from jewellers, which suffered earlier in the year as prices rose, is picking up.
"We are seeing extremely strong jewellery demand over the last week, much stronger than I have seen before," noted UBS analyst John Reade.
Nonetheless the firm dollar is keeping prices under $800.
Oil slipped towards $112 a barrel after a tropical storm in the Gulf of Mexico, which it was feared would affect oil installations there, passed without major disruption.
Platinum and palladium came under pressure from fears slowing economic growth could dent demand from the automotive industry, which consumes more than half of the world's platinum.
Both metals remain lower after dropping more than 6 per cent in Asia, with benchmark Tokyo platinum futures falling by their daily limit to a one-year low, as traders worried about the outlook for demand from carmakers.
"Platinum closed in New York last night around $1,390 and this morning we hit a low below $1,300," said Afshin Nabavi, head of trading at MKS Finance. "That was the main reason for everything else coming off quite sharply."
Spot platinum was at $1,316.00/$1,336.00 at 0953 GMT against $1,386.00/ $1,406.00 an ounce late in New York, having earlier touched a session low of $1,296.50, its weakest level since September 2007.
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