Gold falls as doller gains ground
Monday, 01 September 2008
AP, NEW YORK -- Gold prices fell slightly Friday as a stronger dollar prompted selling from investors seeking commodities as an inflation hedge.
The 15-nation euro bought $1.4671, down from $1.4702 late Thursday in New York. A stronger dollar typically encourages investors to shed hard assets like gold, which is viewed as a safe-haven investment used to hedge against inflation and weakness in the U.S. currency.
Gold for December delivery fell $2 to settle at $835.20 an ounce on the New York Mercantile Exchange, after earlier dropping as low as $834.
Other precious metals traded mixed.
December silver inched up 0.2 cent to settle at $13.707 an ounce on the Nymex, while September copper fell 1.35 cents to settle at $3.387 a pound.
Jon Nadler, analyst with Kitco Bullion Dealers Montreal, said the dollar's rally over the euro undercut gold's momentum and ''basically negated the week's gains.''
Gold ''is down more than $80 on the month, a drop the magnitude of which has not been recorded since 1984,'' Nadler said in a note.
In energy markets, crude oil fell for a second day on expectations that the U.S. government will tap the Strategic Petroleum Reserve if Tropical Storm Gustav disrupts energy production in the Gulf of Mexico.
Light, sweet crude for October delivery fell 14 cents to settle at $115.46 a barrel on the Nymex, after earlier rising as high as $118.76 a barrel.
Other energy futures also fell. Heating oil lost 0.07 cent to settle at $3.1819 a gallon, while gasoline fell 1.15 cents to settle at $3.0099 a gallon.
On the Chicago Board of Trade, agriculture futures traded mostly lower.
Corn for December delivery fell 2.75 cents to settle at $5.85 a bushel, while November soybeans traded flat at $13.24 a bushel.
December wheat fell 9.75 cents to settle at $8.0125 a bushel.