US MIDDAY: gold tumbles

18 Oct, 2008

US gold futures dropped 3 percent on Friday, extending the previous session's decline as deflation fears triggered widespread liquidation by commodity funds, dealers said. December gold down $21.10, or 2.6 percent, at $783.40 an ounce on the COMEX division of the New York Mercantile Exchange at 11:02 am EDT (1502 GMT).
Futures traded in a near $50 range. December briefly dropped to a one-month low of $772.20. It hit a high of $816.90. Weak US economic data and a recent sharp drop of crude oil prices lessened fears of inflation, hurting gold's status as a hedge against a continual rise of the price level, said analysts.
Investor demand slipped as bullion holdings by SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 10.72 tonnes to 756.86 tonnes on October 16. COMEX estimated 10 am volume at 63,433 lots, and options turnover at 8,590 lots. Spot gold was at $780.05/783.05 an ounce, down 3 percent from Thursday's nominal close of $804.50.
Silver stayed below $10 an ounce. December silver down 30.50 cents, or 3.2 percent, at $9.330 an ounce, near a contract low of $9.090. December silver hit a high of $9.930 an ounce. COMEX estimated 10 am volume at 11,468 lots. Spot silver at $9.28/9.38, down 3.4 percent from Thursday's nominal close of $9.63.
NYMEX January platinum down $20.80, or 2.3 percent, at $870.50 an ounce, extending recent sharp losses. Spot platinum at $848.00/868.00. December palladium up $2.30, or 1.3 percent, at $175.40 an ounce, on bargain hunting after hitting a contract low on Thursday. Spot palladium at $169.00/177.00.

Read Comments