US precious metals plunge on stronger US dollar

Washington (Platts)--17Jul2006

US precious metals fell sharply Monday morning as the US dollar rose
against the euro and yen amid escalating tensions in the Middle East. Gold for
August delivery, the most actively traded gold contract on the COMEX, fell
$20/oz to $648/oz by 10:50 am EDT after opening $5.50 lower at $662.50.
September silver fell 47 cents/oz to $11.060/oz.

Platinum group metals on the NYMEX also suffered, with October platinum
falling $12.50/oz to $1,255/oz and September palladium falling $14.50 to $320.

Precious metals have risen over the last month and especially the last
two weeks as tensions in the Middle East escalated. The escalation caused US
oil prices to soar which ,in turn, pressured US equities sharply lower.

But precious metals Monday morning are suffering from a bout of
profit-taking as ongoing tensions in the Middle East have prompted safe haven
buying of the dollar, one analyst said.

"I think the [precious] metals have been hit harder than the US dollar
and oil prices would suggest, and I think that final part could be attributed
to profit-taking on the highs because the market has done pretty well since
one month ago -- a $140 rally. We've just given some of it back," he said.

-- Nick Jonson, nick_jonson@platts.com

For more news, request a free trial to Platts Metals Week at
http://plattsmetals.platts.com or subscribe now at
http://www.platts.com/infostore/product_info.php?cPath=28_37&products_id=68


 

Copyright © 2005 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.