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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: jrhana who wrote (12204)	6/10/2003 5:04:05 PM
From: Rocket Red	Respond to of 39344

COMMODITIES-Gold falls under stronger dollar 6/10/2003 1:14:20 PM By Declan Conway LONDON, June 10 (Reuters) - Gold dropped sharply in Europe on Tuesday afternoon to levels last seen in mid-May, as a bout of dollar strength gave some funds and speculators just the excuse they needed to take profits. The dollar weakened overnight from worries over the stability of the second-biggest U.S. mortgage finance firm rattled Wall Street, but gold broke with recent form and responded by dropping below support of $360 an ounce for the first time in six sessions in Asia. Initially, European trading saw bullion extend its losses before later mounting a small comeback. But gold then retread its traditional path with the dollar later in Tuesday's session, toppling to four-week lows, inversely tracking a burst of dollar strength. A weaker dollar often spurs buying of dollar-denominated gold by making it cheaper for other currency holders, while falling share prices typically raise bullion's safe-haven status. "There were a few funds looking a bit weak and feeble and the dollar strength didn't help. I think they were just looking for an excuse to liquidate their longs," one trader said. "I think the funds will try and push it lower again if they can -- looking towards $350 again at some point," he added. Kevin Crisp, precious metals analyst with Dresdner Bank, said: "The underlying picture for gold at this point in time is not a particularly strong one. When you have volatile times, the real buyers tend to back away from the market waiting to see what the floor is for prices." Spot gold was fetching $351.70 an ounce by the close of European trading, after dropping more than $10 to touch a low of $351 -- a level not seen since mid-May. Bullion had been quoted at $361.60 in New York late on Monday. John Reade of UBS Warburg said: "Gold looks vulnerable to speculative long liquidation that could see the metal back down to the $340-350 level in the coming weeks, although our crystal ball is clouded by the usual foreign exchange market uncertainty," said The dollar traded in the European late afternoon at $1.1684 against the euro, versus its late U.S. level of $1.1716 on Monday.