Gold dips on dollar, platinum hits 4-week low
Singapore, July 7, 2008
Gold slipped on Monday as the dollar crept up against the euro, reducing the metal's appeal as an alternative investment, while platinum dropped to its lowest level in almost four weeks on fears of weakening demand.
Gold fell to $925.25/926.25 an ounce from $932.00/933.00 an ounce in London on Friday. US markets were closed on Friday for the Independence Day.
Trading was muted before US players returned to the market after the holiday. Dealers expected gold to trade in a range of $920 to $940 range with movements in the dollar likely to offer direction.
Spot platinum hit a low of $1,991.50 an ounce, its lowest level since June 12, down from $1,999.00/2,019.00 in London on fears a slowing US economy could hit demand for the metal used in auto catalysts to cleanse fumes from motor exhausts.
"Perhaps the general economic outlook is weighing on demand and there are talks of slowing growth in demand for auto sales in the US," said Adrian Koh, analyst at Philip Futures in Singapore.
"Platinum seems technically weak at the moment and has moved below the important $2,000 level. So, the next level I am looking at is $1,950," he said.
Platinum has lost 13 per cent in value since hitting a record of $2,290 in March. The metal, also used in jewellery, had rallied after a power crisis in main producer South Africa disrupted mining and sparked fears of a supply deficit.
"I am still longer-term positive on platinum and palladium. At the moment, they look a bit top-heavy and could move lower. But in the longer term, the trend is still slowing moving higher," said Koh.
Spot palladium rose to $451.50/459.50 an ounce from $450/455 an ounce. The dollar edged up against the euro as investors waited for clues about the future path of US monetary policy from top Federal Reserve officials including Chairman Ben Bernanke this week.-Reuters