Gold below $800 as dollar hurts commods
Wednesday, 14 November 2007
NEW YORK/LONDON, Nov 13 (Reuters): Commodities tumbled yesterday, with gold slipping below the key psychological mark of $800 an ounce and crude oil and copper prices plummeting, as the dollar rebounded from recent lows.
Corn, soybeans and sugar, the three agricultural produces used for turning out biofuels, were down as well following the weakness in crude. Prices of soft commodities such as coffee and cocoa also floundered.
"All commodities are in a dire need of a break from the run- ups we have seen," said Adam Sarhan, a Florida-based analyst at GlobalMacroResearch.com. "They must pause and regain strength if they're to reach the next level that bulls want."
Analysts and investors said the time seemed ripe for profit- taking after the recent rallies in oil and gold.
"There were very juicy gains to be booked and the traders can't normally resist when there are big gains on the table," Ashok Shah, chief investment officer at fund manager London and Capital, said.
U.S. gold futures plummeted 4 percent as investors in gold bullions took profit amid a wave of risk aversion sweeping through precious metals markets.
Most-active gold futures for December delivery on the COMEX division of the New York Mercantile Exchange fell as much as $35.90 to touch an intraday low of $798.80 an ounce.
In bullion trading, the asking price went as low as $798.30 an ounce, after the $832.20/833.10 level quoted in New York trade late on Friday.
In silver futures, COMEX's December contract cropped more than 5 percent. Platinum and palladium contracts fell about 2 percent.
Analysts blamed the sell-off on the stronger dollar, which always takes some shine off precious metals when it rebounds.
The dollar rose sharply against the euro as nervousness about credit- related losses at U.S. banks triggered a wave of profit- taking.
Risk aversion flared in markets again after last week's warnings from U.S. Federal Reserve Chairman Ben Bernanke, who said the crisis in the U.S. housing market, stemming from the high-risk loan sector, was slowing the world's biggest economy.
Oil, copper and agri products down too Crude prices stalled at the cusp of the milestone level of $100 a barrel last week and extended losses Monday after Saudi Arabia-the world's top producer-said exporter group OPEC would discuss increasing output to cool recent rises to record highs.
U.S. light crude for December delivery CLc1 fell almost $3 to a session low of $93.54 a barrel. Last week, it hit a record high of $98.62. London Brent crude was down $2.18 to $91.00 a barrel during Monday's lows.
Oil prices are up 40 percent from mid-August and the Organisation of the Petroleum Exporting Countries is blaming the phenomenon on speculative investments, international political tensions and a weak dollar-not a lack of inventories.
Corn, soybeans and sugar, the three agricultural produces used for turning out biofuels, were down as well following the weakness in crude. Prices of soft commodities such as coffee and cocoa also floundered.
"All commodities are in a dire need of a break from the run- ups we have seen," said Adam Sarhan, a Florida-based analyst at GlobalMacroResearch.com. "They must pause and regain strength if they're to reach the next level that bulls want."
Analysts and investors said the time seemed ripe for profit- taking after the recent rallies in oil and gold.
"There were very juicy gains to be booked and the traders can't normally resist when there are big gains on the table," Ashok Shah, chief investment officer at fund manager London and Capital, said.
U.S. gold futures plummeted 4 percent as investors in gold bullions took profit amid a wave of risk aversion sweeping through precious metals markets.
Most-active gold futures for December delivery on the COMEX division of the New York Mercantile Exchange fell as much as $35.90 to touch an intraday low of $798.80 an ounce.
In bullion trading, the asking price went as low as $798.30 an ounce, after the $832.20/833.10 level quoted in New York trade late on Friday.
In silver futures, COMEX's December contract cropped more than 5 percent. Platinum and palladium contracts fell about 2 percent.
Analysts blamed the sell-off on the stronger dollar, which always takes some shine off precious metals when it rebounds.
The dollar rose sharply against the euro as nervousness about credit- related losses at U.S. banks triggered a wave of profit- taking.
Risk aversion flared in markets again after last week's warnings from U.S. Federal Reserve Chairman Ben Bernanke, who said the crisis in the U.S. housing market, stemming from the high-risk loan sector, was slowing the world's biggest economy.
Oil, copper and agri products down too Crude prices stalled at the cusp of the milestone level of $100 a barrel last week and extended losses Monday after Saudi Arabia-the world's top producer-said exporter group OPEC would discuss increasing output to cool recent rises to record highs.
U.S. light crude for December delivery CLc1 fell almost $3 to a session low of $93.54 a barrel. Last week, it hit a record high of $98.62. London Brent crude was down $2.18 to $91.00 a barrel during Monday's lows.
Oil prices are up 40 percent from mid-August and the Organisation of the Petroleum Exporting Countries is blaming the phenomenon on speculative investments, international political tensions and a weak dollar-not a lack of inventories.