US gold futures fell sharply on Thursday to close at their lowest levels since late April, and other precious metals also retreated, as a firmer dollar dulled investment demand for the hard assets, dealers said.
August delivery gold sank $15.50, or 2.4 percent, to $633.50 an ounce on the New York Mercantile Exchange's COMEX division, after trading from $651.30 to $625.70 - its cheapest level since April 21.
Prices were slammed by a blend of dollar strength and a downturn in silver, copper and crude oil, said trading sources. A break below technical support at $640 an ounce also sparked further stop-loss selling by funds before scattered buying by bargain hunters propped up prices.
Gold has shed $100 in three weeks in a profit-taking sell-off from a 26-year high hit atop $730 in mid-May. Gold futures rose to an all-time high of $872 an ounce in January 1980, when bullion prices shot to a record $850. Spot gold sank to $626.30/627.10 an ounce, against Wednesday's New York close at $644.40/5.20. Thursday's afternoon bullion fix in London was at $625.
UBS analysts revised downward medium-term precious metals forecasts after gold fell below $638 an ounce, but higher prices were expected for either later in 2006 or into 2007.
John Reade at UBS said bullion should chop around in a range through the summer months, and he added that gold's loss of momentum should "also keep silver on the back foot." Reade forecast gold at $630/oz in one month and $650 in three months, from $720 and $750 previously. Silver was seen at $12/oz and then $12.50, down from $15 and $16.
In platinum, Reade saw the price at $1,250 for the next three months, a revision from his previous outlook of $1,300 in one month and $1,350 in three months. Palladium was seen at $330 from $380 previously.
COMEX July silver closed at $11.9050, off 55 cents or 4.4 percent, dealing from $12.58 to $11.53. Spot silver fell to $11.91/12.01, versus $12.53/12.63 previously. The latest fix reached $12.05 an ounce.
Over at NYMEX, July platinum lost $17 to $1,229.80 an ounce. Spot platinum slid to $1,227/1,232. September palladium lost $10.25 to $342.90 an ounce. Spot was worth $335/340 an ounce.
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