Wednesday July 23, 01:16 PM
Gold hits 2-week low on weak oil; platinum sheds gains |
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By Lewa Pardomuan
SINGAPORE (Reuters) - Gold dropped to its weakest in two weeks on Wednesday as oil extended losses and robbed the metal of some of its appeal as a hedge against inflation, while platinum failed to sustain early gains amid demand fears.
Gold was also weighed by the U.S. dollar, which held much of its gains, and rising stock markets, which in theory reduce bullion's appeal as an alternative investment.
Gold dropped to $940.75/948.00 an ounce from $948.30/949.90 late in New York on Tuesday, having hit an intraday low of $939.20 -- its lowest level since July 10.
Overnight gains in U.S. stocks and a rise in Japan's Nikkei share average encouraged some investors to put their money back into shares and put pressure on bullion, said Kazuhiko Saito of Interes Capital Management in Tokyo.
"There's a shift from the gold market to stocks," said Saito, who pegged support at $920 an ounce.
Oil was down 69 cents at $128.73 a barrel after falling more than $3 to a six-week low in the previous session as the threat of Hurricane Dolly to oil drillers and refiners eased, and concerns over faltering U.S. energy demand increased.
The euro was barely changed at $1.5785. The dollar gained after Philadelphia Federal Reserve President Charles Plosser said rising inflation could force the Fed to start raising rates.
"I am not sure whether the adjustment overnight is going to have a big impact in terms of attracting what you might call bargain buying," said David Moore, analyst at Commonwealth Bank of Australia in Sydney.
"You've got to remember that it was only a couple of weeks ago that gold was actually even lower than current levels."
Gold prices have been volatile since hitting a lifetime high of $1,030.80 an ounce in March. It fell to a four-month low of $845 an ounce in May because of a recovery in the dollar.
Spot platinum hit a high of $1,825 an ounce before falling to $1,791 an ounce, its lowest level since early February. That was down from $1,800.50/1,820.50 an ounce in New York.
Purchases from automakers and platinum jewellers helped stir
up physical trading in Asia but low volume suggested most consumers expected a further correction to levels seen early this year.
Platinum has lost more than 20 percent in value since it spiked to a lifetime high of $2,290 in March as sentiment turned bearish after a slowing U.S. economy sparked fears of falling demand for cars.
Gold futures for August delivery on the COMEX division of the New York Mercantile Exchange fell $7.7 to $940.80 an ounce.
The most active Tokyo gold contract for June 2009 delivery on the Tokyo Commodity Exchange fell 76 yen per gram to 3,285 yen, having hit a 25-year high of 3,363 yen on Tuesday.
Spot palladium dropped to $392.00/400.00 an ounce from $405.50/413.50 late in New York. Silver edged down to $17.75/17.81 an ounce from $18.00/18.08 late in New York.
Precious metals prices at 0654 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 939.20 -5.80 -0.61 12.79
Spot Silver 17.73 -0.20 -1.12 20.04
Spot Platinum 1792.50 -6.00 -0.33 17.93
Spot Palladium 392.00 -10.50 -2.61 6.52
TOCOM Gold 3284.00 -77.00 -2.29 7.32 48434
TOCOM Platinum 6158.00 -203.00 -3.19 15.34 27905
TOCOM Silver 620.70 -23.70 -3.68 14.73 1185
TOCOM Palladium 1390.00 -89.00 -6.02 2.89 2794
Euro/Dollar 1.5767
Dollar/Yen 107.76
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Chikafumi Hodo)
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