MW: Gold falls as dollar continues to strengthening
Copper extends losses to drop over 5%; other metals also fall
NEW YORK (MarketWatch) - Gold futures fell Wednesday, at one point dropping to below $750 an ounce for the first time in more than a month, as the U.S. dollar continued strengthening, pushing down dollar-denominated gold prices.
Meanwhile, copper slumped more than 5%, extending its yearly losses to 37%, the biggest percentage drop in 20 years.
Gold for December delivery fell $17.20, or 2.2%, to $750.80 an ounce on the Comex division of the New York Mercantile Exchange. It fell to $748 overnight, breaking the $750 level for the first time since Sept. 11. Gold has been falling nine out of ten days since Oct. 8.
"Fueling the negative sentiment is the stronger dollar," wrote Edward Meir, a commodities analyst at MF Global. "A struggling U.S. stock market and a wobbly energy complex are not helping matters either."
The dollar continued its rise against the euro, with the European currency trading below $1.3 for the first time since February, 2007. The British pound also dropped against the dollar. A strengthening dollar tends to reduce gold's appeal as an alternative investment.
Also helping push gold lower, crude futures slumped more than 4% to the lowest in more than 16 months. Lower crude prices ease inflation concerns and diminish gold's appeal as a hedge against rising prices.
Heavy selling was also seen in stock markets. Major indexes in Asia and Europe fell sharply lower Wednesday, while U.S. stocks also fell.
On exchange-traded funds, gold in the SPDR Gold Trust, the largest gold ETF, stood at 755.64 tons Tuesday, 0.61 tons lower than Monday, according to the latest data from the fund. Gold at SPDR hit record high of 770.64 tons on Oct. 10.
In other metals, copper slumped 10.7 cents, or 5.3%, to $1.9 a pound. The metal's yearly losses were the worst since 1988, when trading data first became available on the Nymex.
Copper is heavily used in cars, homes, and appliances, so it is seen as an economic barometer. See Commodities Corner.
Elsewhere, December silver lost 2.7% to $9.80 an ounce. January platinum slid 3.5% to $860.10 an ounce, and December palladium fell 2.3% to $178.90 an ounce.
In spot trading, the London gold-fixing price -- used as a benchmark for gold for immediate delivery -- stood at $757.50 an ounce Wednesday morning local time, down $14.50 from Tuesday afternoon.
