Aug 15, 2008
Gold price slumps under 800 dollars
Aug 15, 2008
LONDON, Aug 15, 2008 (AFP) - Gold prices tumbled underneath 800 dollars per ounce on Friday August 15th, hitting a ten-month low point as the precious metal was hampered by the strong US currency and weak oil prices, analysts said.
On the London Bullion Market, the price of gold slid to 772.98 dollars per ounce. That was the lowest point since the end of October.
Gold, which is used in jewellery, dentistry and electronics, has shed one quarter of its value since striking a record high of 1,032.70 dollars in March.
In the foreign exchange market on Friday, the European single currency sank to 1.4698 dollars -- the lowest point since February 20.
A spike in US consumer price inflation (CPI) on Thursday sparked talk of Federal Reserve interest rate hikes, which could make the dollar more attractive to investors and therefore boosted the greenback, dealers said.
"Sentiment has turned more bearish across the metals spectrum (on Friday) after yesterday's CPI reading triggered speculation the Fed may raise interest rates in order to cap inflation," said BullionDesk analyst James Moore.
"Gold has broken below 800 dollars per ounce, platinum has traded to its lowest since December, silver has slumped almost 15 percent, while palladium has dipped to its lowest in almost two years."
A stronger US currency tends to reduce demand for dollar-priced goods, like gold and oil, which become more expensive for buyers holding weaker currencies.
At the same time, gold is regarded by investors as a sound defence against inflation, which in many countries is driven by soaring crude prices.
But oil prices have fallen heavily sharply in recent weeks on mounting fears over slowing global growth and lower demand, traders said.
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