NEW YORK/LONDON: Gold prices plummeted to 8-month lows on Tuesday, ending below $815 an ounce 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 $814.50/815.50 by New York's last quote at 2:15 p.m. EDT, compared with $819.25/820.85 late in New York on Monday. The precious metal is down more than 20 percent 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. US crude futures also weakened, hitting a bottom of $112.31 a barrel, the lowest since early May as the market focused on events in currency markets and the International Energy Agency predicted higher supplies. Carlos Sanchez, precious metals analyst at CPM Group in New York, said that gold could test the $800 level this week due to a rising dollar, crude weakness and a recovering stock market, but bullion could turn stronger toward the end of the year due to positive market fundamentals. US gold futures for December delivery settled down $13.70, or 1.7 percent, at $814.60 an ounce on the COMEX division of New York Mercantile Exchange. Widespread losses
The higher dollar and tumbling oil subdued activity in soft and agricultural commodities. Benchmark copper on the London Metal Exchange hit a 6-month low of $7,207 a tonne as escalating worries about global economic and demand growth prompted investors to accelerate their retreat. The metal used in power and construction has tumbled about 18 percent since a contract high of $8,940 a tonne on July 2. Also under heavy selling pressure was industrial metal platinum used to make autocatalysts. Investors have been selling their holdings on concern about falling demand from car makers. The bulk of the world's platinum is used by automakers in autocatalyst systems that scrub exhaust fumes of dangerous and environmentally damaging chemicals. Spot platinum fell to $1,462.00 an ounce, the lowest since the middle of December, and was last at $1,469.50/1,489.50 an ounce, down from $1,517/1,537 an ounce late on Monday in New York. Prices have slid by about 35 percent since an all-time high of $2,290 an ounce in early March. Ralph D'Esposito, NYMEX floor trader with RJ Futures, said that platinum's weakness was a continuation of the recent sell-off based on fears that demand for platinum auto catalytic converters would tank following dismal global car sales. D'Esposito said that a rising open interest for futures in platinum signaled new short positions were created, but the metal could rebound due to short covering. Silver dropped to $13.99 an ounce, the lowest since December, and was at $14.59/14.65, down from $14.65/14.71, its previous US close on Monday. Palladium touched $298 an ounce, the lowest since October 2006, and was at $306/314 from $317/325 last on Monday in New York.
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