MW: Gold futures fall over 2% as dollar rallies
METALS STOCKS
By Polya Lesova, MarketWatch
Last update: 8:35 a.m. EDT April 18, 2008
NEW YORK (MarketWatch) -- Gold futures fell sharply early Friday, as a rise in the U.S. dollar and a decline in oil prices pressured investment demand for the precious metal.
Gold for June delivery dropped $23.90 to $919 an ounce on the New York Mercantile Exchange.
"The rebound in the dollar and weakness in oil has led to some traders taking profits and making them reluctant to go long in the short term," said Mark O'Byrne, executive director of Gold and Silver Investments Ltd., in a research note.
On Thursday, gold futures fell $5.40 to end at $942.90 an ounce.
The U.S. dollar extended gains against the Japanese yen and the euro Friday after Citigroup, the largest U.S. bank, reported it lost $5.1 billion or $1.02 a share a share in the first quarter, and announced more than $10 billion in writedowns. Read more about Citigroup.
The fact that the figures weren't "disastrously worse than expected" appeared to give the dollar a lift amid signs markets are becoming more immune "to numbers of this magnitude," said Daragh Maher, a currency analyst at Calyon Bank.
The dollar index, which tracks the performance of the greenback against a basket of other major currencies, rose 0.9% at 72.20. See Currencies.
Also on the Nymex, other metals prices posted sharp losses. May silver futures fell 59 cents, or 3.3%, to $17.70 an ounce. July platinum futures dropped $39.40 to $2,022.10 an ounce and June palladium declined $10.20 to $451 an ounce.
May copper futures fell 9 cents to $3.82 a pound.
Crude-oil futures also fell sharply. The May crude contract was last down $1.57 to $113.30 a barrel in electronic trading on the Nymex.
Polya Lesova is a MarketWatch reporter based in New York.