SINGAPORE - Gold fell more than 2 per cent to its lowest level in nearly four weeks yesterday, dragging down mining shares in Australia and Hong Kong, as a rising US dollar encouraged investors to switch out of precious and base metals.
Other precious metals also declined, with silver losing
more than 3 per cent and platinum hitting a one-week low in volatile trade.
Gold reached a high of US$661.25 ($1073.90) an ounce before falling to as low as US$643.00 as fund selling accelerated.
Spot gold was quoted at US$646.10/646.90 an ounce down from US$659.20/660.00 late in New York.
Newcrest Mining, Australia's top gold miner, shed 10 per cent to A$20.08, gold and copper miner Oxiana lost 11.7 per cent to A$2.63, and Zijin Mining Group dropped about 14 per cent.
Zinc and lead miner Zinifex lost A$1.61, or 14.9 per cent, to A$9.20.
Some dealers said bullion was consolidating after hitting multi-year highs recently, with plenty of buying interest waiting at lower levels. Gold surged to a 26-year high of US$730 an ounce on May 12.
"I think the market will try to climb back up, perhaps to the US$671 to US$675 level, after sustaining such a beating last Friday. Commercials were taking an opportunity to cover their shorts in silver and gold," said a dealer in Singapore.
"From the latest CFTC [Commodity Futures Trading Commission] numbers, you can take that as a good sign the smart-money people are doing what they know best: that is to buy low and sell high," he said.
Long positions in US gold and silver futures have fallen as speculative funds exit commodities, while short exposures to copper have more than doubled, data released on Friday showed.
The CFTC said in its weekly Commitments of Traders report that net non-commercial long positions for gold stood at 126,157 lots on May 16, down 6 per cent, or 7779 lots, from May 9.
Net short positions in copper stood at 2482 lots, more than double the 915 lots seen the week before.
In Japan, benchmark gold futures on the Tokyo Commodity Exchange, currently April 2007, dropped by the daily 60-yen limit to 2434 ($35) per gram as a sell-off in New York and a strong US dollar ignited profit-taking by Japanese investors.
"Although most precious and base metals are experiencing dramatic slides of late, it should be of no surprise given the almost daily dramatic movements upwards seen over the last three months," said N.M. Rothschild in a daily report.
Shanghai copper and aluminium futures plunged by their daily lower trading limits late last week on worries about economic growth and inflation.
- REUTERS
SINGAPORE - Gold fell more than 2 per cent to its lowest level in nearly four weeks yesterday, dragging down mining shares in Australia and Hong Kong, as a rising US dollar encouraged investors to switch out of precious and base metals.
Other precious metals also declined, with silver losing
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