Daily Gold Update

Source: Reuters

London— Commodity prices tumbled across the board on Thursday as investors retreated into cash, taking profits after a series of record peaks this year. Gold prices fell to a one-month low as traders, eyeing a firmer dollar, took their gains to pay for losses in other markets, while oil and industrial metals fell on worries over the outlook for demand. Spot gold slipped to $904.65 a troy ounce, a level last seen on Feb. 18, a drop of more than $100 since the precious metal hit a record high of $1,030.80 on Monday. It was at $915.60/916.70 at 12:46 p.m. London time, from $944.20/945.00 on Wednesday.

Fund managers said the trigger for the sell-off this week could have been a decision by the United States Federal Reserve to cut interest rates by only 75 basis points to 2.25 percent against hopes of a one-percentage-point cut. That helped boost the dollar, which has gained nearly 3 percent against the euro since Tuesday. The dollar�s retreat from all-time lows against the euro has surprised some looking for levels beyond $1.60 against the euro. A rising American currency makes dollar-denominated commodities more expensive for holders of other currencies. Its tumble this year was one of the reasons for the surge in commodity prices. �People have done very well in commodities and they may be doing badly elsewhere,� said Ian Morley, chief executive at the fund manager Dawnay Day Brokers. �I wouldn�t be surprised if they are cashing in to meet margin calls.� He added, �Prices in the long term may be going higher, but the recent rise has been speculative and we�ve run out of fundamentals to explain it.� See full story.