US MIDDAY: gold drops

US gold futures tumbled below $750 an ounce on Wednesday as a dollar surge triggered widespread sell-offs in commodities amid falling stock markets on recession fears. December gold drops $14.00, or 1.8 percent, at $754.00 an ounce on the COMEX division of the New York Mercantile Exchange at 10:54 am EDT (1454 GMT).
Futures traded in a $30 range. December dropped to a low of $744.20. It hit a high of $777.90. Gold pummelled by the dollar, which hit a two-year high as a deteriorating global economic picture and worries stability would not return any time soon to financial markets spurred investors to dump risky assets.
The dollar's strength triggered weakness in commodities across the board. Reuters/Jefferies CRB index down 2.3 percent, led by a more than 5 percent drop of the US crude futures. The inability of gold to rally amid sharp losses in the stock markets turned potential bullion buyers away, as open interest of COMEX futures signals continued liquidation, said RBC Capital Markets Global Futures Vice President George Gero.
Futures investors could take physical delivery of gold on the first notice day of the December futures due to strong demand for gold bullion, said COMEX gold options floor trader Jonathan Jossen. The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its bullion holdings fell slightly on October 21 to 755.64 tonnes.
COMEX estimated 9:00 am volume at 54,820 lots, and options turnover at 5,725 lots. Spot gold at $748.75 an ounce, down 2.6 percent from Tuesday's close of $770.10. December silver down 24.50 cents, or 2.3 percent, to $9.830 an ounce. COMEX estimated 9:00 am volume at 6,853 lots. Spot silver at $9.86, down 2.1 percent from Tuesday's finish of $10.07.
NYMEX January platinum down $20.60, or 2.3 percent, to $871.10 an ounce. Trading volume in the PGM futures market remained thin as big firms seen pulling out of commodities and opting for cash - traders. Spot platinum at $851.50, down 3.8 percent from Tuesday's late quote of $885.50. December palladium down $3.25, or 1.8 percent, at $179.85 an ounce. Spot palladium at $174.00, down 3.1 percent from Tuesday's close of $179.50.