Gold hits fresh 2-week low as stocks dive |
| Date Added: January 22, 2008 12:53:50 AM |
Source: http://www.reuters.com/article/goldMktRpt/idUST18238720080122?rpc=401& By Chikafumi Hodo TOKYO, Jan 22 (Reuters) - Gold fell to a fresh 2-week low on Tuesday, as euro weakness against the dollar, falls in energy prices and plunges in global equity prices sparked profit taking in the metal. Japanese shares fell more than 4 percent and Chinese stocks by more than 5 percent, prompting investors to pull out from gold and other commodities. But traders expected gold to eventually draw safe-haven demand as overall financial market uncertainty on fear of a U.S. recession. "When heavy sell-offs in global stocks are happening, it's tough to buy gold," said Hiroyuki Kikukawa, analyst at IDO Securities in Tokyo. "Gold is pressured now as the dollar is firming and stocks are plunging. In the short term, gold could be weighed down but the market is still bullish on gold in the long term," Kikukawa said. At 0313 GMT, spot gold <XAU=> was trading at $862.50/863.50 an ounce, down from $864.30/865.00 in late European trade on Monday. U.S. markets were closed on Monday for the Martin Luther King Day holiday. The spot price fell as far as $855.00 on Tuesday -- the lowest since Jan. 4. Gold was off more than 6 percent from record highs of $914 per ounce hit last week. "There are still many market bulls in gold. Funds will flow into gold once the stock market calms down," said a trader at a Japanese trading house. "At the moment, people want to lock in profits from gold and lower exposures in commodities," he said. COMEX gold futures plunged from Friday's New York settlement. The most active February contract GCG8 was down $18.70 or 2.1 percent at $863.00. Sharp falls in Japanese precious metals prices as the yen reached a 2-½ year high against the dollar put pressure on dollar-denominated gold prices. The benchmark December contract on the Tokyo Commodity Exchange <0#JAU:> fell to a one-month low of 2,934 yen a gram, before finishing the morning session at 2,958 yen, down 49 yen or 1.6 percent from Monday's close. Falls in Japan's benchmark Nikkei share average .N225 weighed on TOCOM prices. "Japanese retail players are unwinding positions in TOCOM gold, possibly to cover losses from the Nikkei," the Japanese trade house trader said. Japanese stocks tumbled more than 4 percent to a 28-month low on Tuesday as investors followed others around the world to dump stocks on growing fears that the U.S. economy is heading for recession. Key TOCOM platinum futures <0#JPL:> fell to the lowest in nearly seven weeks, which pressured the cash price. December TOCOM platinum closed morning trade down 94 yen or 1.82 percent at 5,074 yen a gram. Platinum <XPT=> fell to $1,522/1,527 an ounce from $1,537/1,542 in Europe on Monday. Precious metals prices at 0313 GMT Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 862.50 -3.50 -0.40 3.58 Spot Silver 15.58 0.03 +0.19 5.48 Spot Platinum 1522.00 -14.50 -0.94 0.13 Spot Palladium 362.00 3.00 +0.84 -1.63 TOCOM Gold 2958.00 -49.00 -1.63 -3.33 59366 TOCOM Platinum 5074.00 -94.00 -1.82 -4.96 23770 TOCOM Silver 534.30 -12.20 -2.23 -1.24 993 TOCOM Palladium 1257.00 -15.00 -1.18 -6.96 518 Euro/Dollar 1.4446 Dollar/Yen 106.37 TOCOM prices in yen per gram, except for silver which is in yen per 10 grams, spot prices in $ per ounce. (Reporting by Chikafumi Hodo; Editing by Michael Urquhart) |