Gold futures tumbled on fund and bank selling early on Thursday, after inflation fears fanned by high oil prices amid a busy hurricane season earlier boosted prices to near-18-year and contract highs, dealers said.
December delivery gold on the New York Mercantile Exchange's COMEX division fell $4.60, or 0.97 percent, to $468 an ounce by 10:40 am EDT, trading from $479 to a three-day low of $466.80. Gold lost some of its shine as traders cashed in on gains from the market's rapid rise over the past week to its highest level since January 1988.
Investors have been turning to the precious commodity as a haven, prompted by fears of more storm damage and high energy prices choking off US economic growth, dealers said.
"There was investment bank selling today on the rally up to $479. You are seeing profit-taking," said James Quinn, commodities commentator at AG Edwards & Sons.
"The market is short-term overbought and we needed a correction," he said.
Open interest rose by 4,224 contracts to 363,315 lots on Tuesday in the latest data available.
Nonetheless, fundamentals like strong bullion demand, lower global mine production of late and fewer sales from central bank reserves have been supportive to prices.
Bullion hit a near-18-year high at $475 overnight in Asia.
But, at the last check spot, gold fell to $464.70/465.40, below Wednesday's New York close at $469.90/0.60. Thursday's morning fix in London was at $466.25.
COMEX December silver was flat at $7.415 an ounce, moving from $7.355 and $7.52 - a three-month high. Spot silver hit $7.36/39 versus $7.35/38 previously. It fixed at $7.4225.
NYMEX October platinum lost $10.80 to $925.50 an ounce. The market hit an eight-month high earlier this week near $939. Spot was at $921/925. December palladium shed $4.15 to $199. Futures on Tuesday reached a near-six-month high at $208.90. Spot palladium traded at $196/198.
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