US MIDDAY: gold falls

New York gold futures dropped 1 percent early on Monday as a bounce in the stock market lessened safe-haven demand, triggering stop-loss orders and profit taking. Gold for June delivery down $10.20, or 1.1 percent, at $921.10 an ounce at 10:18 am EDT (1418 GMT) on the COMEX division of the New York Mercantile Exchange.
Ranged from $919.00 to $934.10. Gold futures pressured by profit taking after a stronger US stock market led to sell-stops, said traders. Lower oil prices combined with deflationary forces should present headwind to further gains in gold, following recent rise on safe-haven buying and weaker stock markets, said James Steel, chief commodities analyst at HSBC.
Diminished risk appetite and competition by higher-yield currencies prompted investors to sell gold, said dealers. Investor sentiment was less bullish after data showed higher net long positions combined with a jump in open interest in the week up to May 12, suggesting short-term bullion traders could take profits, according to weekly CFTC report. Gold/oil ratio at 15.98, lower than the 16.41 of its previous session. COMEX estimated 10 am volume at 57,314 lots.
Spot gold traded at $920.35 an ounce, down 1.1 percent from its late Friday quote in New York. London gold fix $921.00 an ounce. COMEX July silver down 31.50 cents, or 2.3 percent, at $13.695 an ounce, as the more volatile metal took direction from the gold market. Ranged from $13.63 to $14.08.
COMEX estimated 10 am volume at 9,853 lots. Spot silver was at $13.69 an ounce, down 1.7 percent from its previous finish. London silver fix at $13.79 an ounce. NYMEX July platinum up $13.70, or 1.2 percent, at $1,122.70 an ounce as a stock market rally temporarily brightened the outlook for the auto sector demand.
Global demand from automakers for platinum catalytic converters dropped over 8 percent to 3.81 million ounces in 2008, as North American vehicle output tumbled amid the economic slowdown, said Johnson Matthey. Platinum could climb to $1,350 an ounce in the next six months if investment demand firms and Chinese jewellery buying stays strong, but weak auto usage will still weigh on prices, added Johnson Matthey.
Spot platinum at $1,115.50 an ounce, up 1.4 percent from its late Friday quote. June palladium down 95 cents at $226.00 an ounce on profit taking, trading in narrow range. Spot palladium was at $224.00 an ounce, up 0.7 percent from its previous finish.