Gold tumbles in London

Gold slipped more than 3 percent to a one-week low on Friday as the dollar jumped after better than expected earnings results from Citigroup. The metal fell as low as $904.35 an ounce and was quoted at $911.90/912.90 at 1500 GMT, against $938.90/939.70 in New York late on Thursday, when it hit a three-week high.
The dollar touched a seven-week high against the yen and pulled further away from a record low versus the euro after Citigroup's results surprised investors with results that were less bleak than many had feared.
"Precious (metals) are all tracking the dollar," said David Thurtell, analyst at BNP Paribas. "Investors who have been seeking the relative safety of commodities have unwound some of that long position to get back into equities." A rising dollar makes dollar-denominated gold more expensive for holders of other currencies. The metal, traditionally seen as a safe-haven asset and a hedge against oil-led inflation, often thrives on bad news.
Oil recovered to trade at record highs, after falling more than $2 a barrel on worries about a possible slowdown in China, the world's second biggest energy consumer. Looking ahead, traders said bullion markets were waiting for a meeting of the US Federal Reserve later this month. Further aggressive interest rate cuts in the United States could hit the dollar and boost gold prices.
"We continue to find gold uninspiring at the moment and are disappointed that the metal is so far off its recent all-time high," said John Reade, analyst at UBS Investment Bank. "While some long liquidation has occurred and jewellery demand has reappeared, neither of these indicators is telling us that gold is a raging tactical buy."
Huge writedowns from US banks have undermined the health of the US economy, and sentiment towards the dollar. But some banks and analysts are now saying the worst of the turmoil that has plagued financial markets since last August could be coming to an end.
"The increasing risk appetite of investors could lead to shifts of assets into stock markets, which might be negative for gold," analysts at Dresdner Kleinwort said in a report. A metals analyst in London said that short-term sentiment had turned bearish because of the sell-off, but the metal might recover on physical buying at price dips.
Palladium was down at $448/453 per ounce against $458/463 in New York, and silver fell more than 3 percent to $17.67/17.72 an ounce from $18.23/18.28 on Thursday. Platinum fell more than 1 percent to a low of $2,017 an ounce before rising to $2,035/2,050, versus $2,042/2,052 late on Thursday.
Analysts expected prices to hold firm. "The South African power shortages are keeping the platinum market on edge as a swift resolution to the structural problems is far from near," Barclays Capital said in a report.
"We forecast prices to average $2,100/oz in Q2 as platinum supplies are heavily dependent on South Africa and the delicate power supply situation as well as mine safety concerns leave mine output extremely susceptible to potential disruptions."