Gold falls for 4th day on oil drop, dollar gain
By STEVENSON JACOBS, AP Business Writer
Wednesday, August 6, 2008 5:23 PM CDT
NEW YORK 8/06/08 - Gold closed lower for a fourth straight session Wednesday as another drop in crude prices coupled with a stronger dollar diminished the metal’s appeal as a safe-haven asset.
Other commodities traded mostly lower, with corn hitting a four-month low and soybeans also falling sharply.
Gold has faced strong downward pressure in recent weeks - dropping 5 percent in the past month - as dwindling demand for energy and a weakening U.S. economy cuts into the price of crude and other commodities.
Further weighing on prices, the dollar has gained ground in recent days against the euro, encouraging selling by investors who bought precious metals to hedge against inflation and weakness in the U.S. currency.
“Intense pressure from further declines in crude oil ... and an additional gain in the U.S. dollar prevented the precious metal from regaining its composure,” Jon Nadler, analyst with Kitco Bullion Dealers Montreal, said in a note.
Gold for December delivery fell $2.90 to settle at $886.10 on the New York Mercantile Exchange, after earlier falling to $880.50, the lowest level since June 16.
Other precious metals traded mixed. Silver for September delivery dropped 6.7 cents to settle at $16.505 an ounce on the Nymex, while September copper added just over half a penny to settle at $3.4235 a pound.
Crude fell for a third session after a U.S. government report showed crude oil and other fuel supplies jumped last month, signaling that high prices are continuing to curtail demand. The stronger dollar also pressured crude.
Light, sweet crude for September delivery finished 59 cents lower at $118.58 a barrel on the Nymex, the lowest close since May 2. Prices have now fallen nearly $30 below their trading high of $147.27, reached July 11.
Other energy futures also fell. Heating oil futures lost 4.41 cents to settle at $3.2379 a gallon, while gasoline prices fell 0.71 cent to settle at $2.9493 a gallon.
In agriculture, corn and soybeans kept falling Wednesday after a large trading fund liquidated a large amount of positions and sparked a big sell-off, said Vic Lespinasse of Grainanalyst.com.
Corn for December delivery dropped 17.25 cents to settle at $5.2775 a bushel on the Chicago Board of Trade, after earlier falling to $5.2275, the lowest level since March 24.
Soybeans for November delivery dropped 47 cents to settle at $12.22 a bushel on the CBOT, after earlier slipping to $11.99, the lowest since May 2.
Meanwhile, September wheat prices fell 14.25 cents to settle at $7.6575 a bushel on the CBOT.
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