Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures dropped by as much as $35 an ounce Thursday, tracking a broad commodities selloff and poised to break a seven-session winning streak as prices for crude oil fell below $90 a barrel and the U.S. dollar strengthened. At last check, gold for August delivery � the most active futures contract � fell $28.40, or 1.8%,to $1,525.10 an ounce on the Comex division of the New York Mercantile Exchange. Gold futures modestly pared their losses after the U.S. Commerce Department estimated that sales of new homes fell 2.1% in May. Earlier, prices hit a low of $1,518.30. The contract hasn�t traded at levels this low since May 23. It had gained nearly $38 during a seven-session winning streak. The benchmark July silver contract also sank, falling 3.8%, or $1.38, to $35.36.

�First and foremost, gold is reacting to the sharply higher U.S. dollar index,� said Darin Newsom, a senior analyst at Telvent DTN. �Then there is the crude oil selloff.� The International Energy Agency said Thursday that it will release 60 million barrels of oil into world markets in the coming month to counteract lost production in Libya. �If we are getting 60 million barrels of new crude oil into the global market, then the inflationary story is really taking a beating today, thus gold indirectly gets hit, too,� said Richard Hastings, a macro strategist at Global Hunter Securities. See full story.