Gold Drops Below $800 an Ounce in Asia as Dollar Strengthens
By Dave McCombs
Aug. 15 (Bloomberg) -- Gold tumbled below $800 an ounce in Asian trading as the dollar headed for its longest winning streak in more than two years, reducing the appeal of the metal as an alternative investment to U.S. assets.
Oil, gold, copper and corn have plunged from records this year as the dollar strengthened and concern mounted that slower global economic growth will cut demand for raw materials. Silver and platinum also plunged today amid increasing expectations the Federal Reserve won't cut interest rates.
``It's really a reshuffle of assets away from commodities, a sector rotation,'' Jon Nadler, a senior analyst fed at Kitco Minerals & Metals Inc. in Montreal, said in a telephone interview today. ``Investors see that the Fed is resolved to fight inflation by hiking rates,'' which may help push up the dollar, he said.
Gold for immediate delivery fell as much as $17.15 to $789.47 an ounce, a 2.1 percent decline from yesterday in New York and the lowest since Dec. 17. The metal traded at $796.72 an ounce at 10:22 a.m. in Tokyo.
Immediate-delivery silver plunged 12.1 percent to $12.46 an ounce, the lowest since Sept. 14, before trading at $12.98.
Platinum for June delivery dropped 5.4 percent to 5,104 yen a gram ($1,445 an ounce) at 10:02 a.m. local time on the Tokyo Commodity Exchange.
The dollar climbed to a 5 1/2-month high versus the European single currency, heading for a fifth weekly gain, on speculation a drop in oil prices will support economic growth in the U.S., the world's largest consumer of the fuel.
The dollar gained to $1.4762, the strongest since Feb. 21, before trading at $1.4773 as of 9:50 a.m. in Tokyo from $1.4826 yesterday.
To contact the reporter for this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net |
