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Gold closes lower as oil retreats, dollar gains |
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Gold for June delivery closed down $2.20 at $675.10 an ounce on the New York Mercantile Exchange. On Tuesday, gold futures declined $6.20 to close at $677.30 an ounce.
"Whereas gold did not appear to pay attention to the declining dollar versus euro situation most of last week, the gains that the greenback is now recording against the same currency are painfully etched into each dollar of decline in the metals' values," said Jon Nadler, analyst at Kitco Bullion Dealers, said in e-mailed commentary.
Gold prices recovered a bit from the day's lowest level Wednesday. The June contract had dipped to $670 during the session, the contract's weakest intraday level since April 3.
"Thirty dollars have been wiped off the gold chart in a relatively brief period," Nadler said, referring to the metal's recent losses. "Consolidation is no longer the operative word; we have had a full-on correction here."
The dollar extended its prior-session gains Wednesday, touching a two-month peak against the yen, as traders continued to react to a stronger-than-expected manufacturing report released on Tuesday.
Crude-oil futures fell under $64 a barrel Wednesday as traders digested a second-weekly increase in U.S. crude supplies.
Blanchard and Co., the largest retailer of American coins and precious metals in the U.S., said in a statement Wednesday that there has been a big sell-off in central bank gold reserves in recent weeks.
"The gold market has absorbed 89 tons of ECB sales over the last seven weeks, including 12.3 tons last week alone," said Donald W. Doyle, Jr., chairman and CEO of Blanchard, in a statement.
"Considering that central banks sold 112 tons into the market over the last six months, gold has performed remarkably well in light of this huge additional supply," Doyle said.
Other metals prices were mixed. July silver ended down 3.5 cents at $13.335 an ounce, July platinum fell $1.80 at $1,299.10 an ounce, while June palladium closed up 80 cents at $374.95 an ounce.
July copper closed up 1 cent at $3.6445 a pound. The contract gained 2.2% on Tuesday as a strike in Peru continued to threaten production.
On the supply side, gold warehouse inventories rose by 21,448 troy ounces to stand at 7.6 million troy ounces as of late Tuesday, according to Nymex data. Silver supplies fell by 44,534 troy ounces to 131.3 million troy ounces, while copper supplies fell by 78 short tons to 33,071 short tons.
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