New York (Platts)--16Oct2008

Gold prices took a major plunge Thursday morning on the COMEX, with most
of the declining coming in the last few hours. According to trade sources,
there has been a major liquidation on the back of the strong dollar and
renewed jitters in the equity markets.

"Maybe some longs had to sell off their positions to meet margin calls in
the stock market," one trader suggested.

Various factors seem to be working against gold at present --
particularly the sharp rebound of the dollar against the euro and the pound
sterling. The greenback is currently trading at $1.3417/euro and $1.7259/GBP.

Basis the nearby December contract on the COMEX, gold plunged to a low of
$793.50/oz earlier in the day from the opening price of $836/oz. This happened
pretty quickly, as exemplified by the London AM and PM Fixes. After firming up
to $834.50/oz at the AM Fix, gold plunged to $802/oz at the PM Fix.

As was the case on Wednesday, the selloff in precious metals appear to be
across the commodities spectrum, as copper is down sharply and the energy
complex is off also. The nearby November light crude contract on the COMEX is
off 24 cents, trading at $74.30/barrel. The December contract, however, has
plunged by $2.13 to $72.75/barrel.

On the NYMEX, the January platinum contract plummeted $82.20 to $893/oz
when it last traded at 10:45 am and the December palladium contract plunged
$22.60 to $173/oz.

Industrial metals are being affected by prospects for poor economic
growth in the industrialized world for the remainder of 2008 and perhaps much
of 2009, according to a market analyst.

--Ovid Abrams; ovid_abrams@platts.com