Business | Markets
Gold plunges to 8-month low as investors jump ship
Gold prices plummeted to 8-month lows on Tuesday as the dollar's rally triggered a massive sell-off, hitting oil and industrial metals as well.
- Agencies
- Published: 19:03 August 12, 2008
London: Gold prices plummeted to 8-month lows on Tuesday as the dollar's rally triggered a massive sell-off, hitting oil and industrial metals as well.
Spot gold touched $801.90 an ounce, its lowest level since late December, and was at $816.50/817.45 at 1433 GMT compared with $819.25/820.85 late in New York on Monday.
The precious metal is down more than 20 per cent since hitting a record high of $1,030.80 on March 17.
"The speed and severity of the dollar's run higher has resulted in some long liquidation," said Daniel Hynes, analyst at Merrill Lynch.
"At the moment it is hard to see an end to it, but we still have some supportive factors such as inflation, geopolitical tensions and falling mine supply."
Prices of the metal attempted a recovery earlier on Tuesday after the dollar slipped on profit-taking.
However, the dollar was still hovering near a 6-month high against a basket of major currencies as investors looked beyond US growth worries to a slowing global economy.
A stronger US currency makes commodities priced in dollars more expensive for holders of other currencies.
Oil hit $112.48 a barrel, the lowest since early May as the market focused on events in currency markets and the International Energy Agency predicted higher supplies.
"It looks like sentiment towards gold has turned negative, we're seeing long liquidation on the back of both dollar movement and the oil price movement," said Suki Cooper, analyst at Barclays Capital.
More from Markets
More from Business
Business Editor's choice
-
Saudi-Bahraini economic ties hit new high
Whilst press reports continue speculating on a possible new political structure defining ties between Saudi Arabia and Bahrain, facts on the ground confirm ever- stronger economic ties between the two neighbours
-
Cupid targets the Fed with early tweets
Declarations range from pure romance to cute overtures and racier fare
-
Do unemployment figures flatter to deceive?
Jobseekers and recruiters give out mixed signals ranging from optimism to downright despair even as official data show recovery
