Gold prices fell by nearly 3% Tuesday as the dollar surged after comments on inflation from US Fed chairman Ben Bernanke triggered speculation of an interest rate rise.
Thinly traded nearby June gold declined $26.80 to settle at $867.90 an ounce on the Comex division of the New York Mercantile Exchange. The most-active August contract shed $26.90 to close at $871.20.
Gold was last at $866.60/868.00 an ounce by New York's last quote, after touching a session low of $865.15 an ounce, compared with $894.00/896.00 late in New York on Monday.
The dollar rose earlier on Tuesday on speculation an increased focus on inflation by the Federal Reserve may lead to a hike in US interest rates later this year.
US Federal Reserve chairman Ben Bernanke on Tuesday reiterated concerns about the outlook for inflation. Such a move could halt the dollar's fall, denting gold's appeal as an alternative investment to the US currency.
The US gold contract for August delivery on COMEX division of New York Mercantile Exchange settled down $26.90, or 2.9%, at $871.20 an ounce.
Silver futures also declined as the US dollar rose and crude oil slumped. Comex July silver fell 57.5c to $16.635 an ounce.
Spot platinum meanwhile slipped to $1991.50/2011.50 from $2037.50/2057.50 late in New York on Monday, largely tracking gold and other markets.
Among other precious metals, palladium edged up to $421.00/429.00 from $426/434 late in New York on Monday, while silver was trading at $16.58/16.64 against its Monday U.S. close of $17.07/17.14.
Wednesday, June 11, 2008
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