Gold slides in Europe

Gold slid by more than 1 percent on Tuesday, echoing a sharp decline in the oil price and ignoring the decline in the dollar to succumb to profit-taking after having hit record highs on Monday. The correlation between gold and the dollar index reached its most negative in nearly three months, meaning any decline in the US currency would, in theory at least, help boost the gold price.
Brent crude oil futures lost more than $3 a barrel after top producer Saudi Arabia cut production in response to weak demand, according to two Saudi-based industry sources. This added to pressure on the commodities complex from Goldman Sachs' decision on Monday to book profits on its positions in crude oil, copper, platinum and some agricultural commodities weighed on the raw materials sector, including gold. Spot gold was last down 1.1 percent at $1,449.66 an ounce by 1419 GMT, having earlier held at a session high of $1,467.10. On Monday, gold hit a record at $1,476.21.
US gold futures for June were down 1.1 percent at $1,415.30 an ounce. "Commodity prices, not only gold but also the base metals and the energy space are not profiting from the weaker dollar," said Commerzbank analyst Daniel Briesemann."Market players are taking the opportunity to take some profits after the sharp rises of the last few days or weeks," he said, adding that he believed gold would eventually resume its current uptrend to challenge $1,500 an ounce.
Adding to potential support for gold was Japan's decision to raise the severity of its nuclear disaster to the highest level. "If this was safe-haven buying, you wouldn't see silver so much stronger than gold. This just shows the spec money is going into silver," said VTB Capital analyst Andrey Kryuchenkov. The gold/silver ratio fell to its lowest since at least 1989 on Tuesday, reflecting silver's outperformance relative to gold. Goldman Sachs' decision on Monday to close its long positions in copper, crude, platinum and some agricultural commodities initially rattled some of the positive sentiment towards these more growth-linked assets.
Holding of gold in the SPDR Gold Trust, the largest gold exchange-traded fund, were unchanged for a third trading day on Tuesday, leaving global holdings of metal at 64.322 million ounces, up 1.55 million ounces so far this week and up 2.5 percent so far this month. Silver released its earlier gains to trade down 0.3 percent at $40.05 an ounce, and is more than 4 percent below Monday's 31-year high at $41.93. Platinum was down 0.7 percent at $1,770.00 an ounce, while palladium fell 1.8 percent to $767.50.