Tuesday, August 5, 2008
LONDON, Aug 5 (Reuters) – Gold fell more than 2 percent in Europe on Tuesday, tracking losses in other commodities, notably oil which lost more than $2 a barrel to a three-month low.
The dollar reached a new seven-week high against a basket of currencies, further dampening interest in gold. Traders are awaiting the rates announcement of the U.S. Federal Reserve later in the session.
Gold fell as low as $875.60 an ounce, its weakest level in nearly six weeks. At 1535 GMT it was at $877.00/878.00 an ounce, down from $895.55/896.95 late in New York on Monday.
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COMEX December gold GCZ8 lost $22.10 to $878.00 an ounce.
A firm dollar typically pressures gold, as it dents the precious metal’s appeal as an alternative investment. [ID:nL5644759]
“Gold has sold off on oil’s steep falls and with sharp falls in many other commodity markets,” said Mark O’Byrne, executive director of Gold and Silver Investments.
“The CRB Reuters Jefferies Commodity Index was down 3 percent yesterday, its largest one day sell-off since last March,” he added.