* Gold falls with crude after latest Goldman warning
* Shrinking US trade deficit, slowdown signs weigh on gold
* Coming up: U.S. March retail sales Wednesday
(Recasts, adds comment, updates market activity, changes
byline, dateline, previously LONDON)
By Frank Tang
NEW YORK, April 12 (Reuters) - Gold dropped 1 percent on
Tuesday, on track for its biggest fall in a month, as a sharp
drop in crude oil following another bearish forecast from
Goldman Sachs dragged the metal further from record highs.
Bullion also weakened after data showed the U.S. trade
deficit shrank in February, a sign of slowing global demand.
Gold has benefited in the past several months as rallies in oil
and grains stoked inflation worries.
Silver fell from Monday's 31-year highs.
"That (Goldman report) has given enough reasons for
investors to trim their positions, in particular for those
markets that have gone parabolic. That's enough to cool
enthusiasm for commodities at the moment," said Mark Luschini,
chief investment strategist of broker-dealer Janney Montgomery
Scott with $53 billion of assets under management.
But he added: "I don't think this is the end of the
commodity bull market."
Spot gold <XAU=> dropped 1 percent to $1,451.40 an ounce by
11:46 a.m. EDT (1546 GMT), having earlier hit a one-week low of
$1,443.49. On Monday, gold hit a record at $1,476.21.
U.S. gold futures for June <GCM1> were down 1.1 percent at
$1,452.60 an ounce, with trading volume rebounding after
slower-than-normal activity in the last several sessions.
Goldman Sachs <GS.N> rocked oil markets for a second day by
calling a near $20 fall in the price of Brent crude <LCOc1> in
the coming months, saying speculators have pushed prices ahead
of fundamentals. []
It was the second warning of a steep market reversal from
the long-term commodity bull in as many days, as bullion also
fell sharply on Monday after Goldman recommended clients close
a trade heavily weighted towards U.S. crude futures.
Poor investor sentiment more than offset weakness in the
dollar, which fell to a 15-month low against the euro. []
"Commodity prices, not only gold but also the base metals
and the energy space are not profiting from the weaker dollar,"
said Commerzbank analyst Daniel Briesemann.
"Market players are taking the opportunity to take some
profits after the sharp rises of the last few days or weeks,"
he said.
Commodities investors also took heed of a warning by the
International Monetary Fund on Monday that soaring oil prices
and inflation in emerging economies pose new risks to global
recovery even as they are not yet strong enough to derail it.
The threat to global inflation from higher energy prices
has been one of the driving forces behind gains in gold.
Silver <XAG=> reversed earlier gains to trade down 0.5
percent at $39.97 an ounce, and was about 5 percent below
Monday's 31-year high at $41.93.
Among platinum group metals, platinum <XPT=> eased 0.3
percent at $1,774.49 an ounce, while palladium <XPD=> fell 1.7
percent to $768.
Prices at 11:46 a.m. EDT (1546 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCM1> 1452.60 -15.50 -1.1% 2.2%
US silver <SIK1> 40.020 -0.592 -1.5% 29.4%
US platinum <PLN1> 1780.50 -12.30 -0.7% 0.1%
US palladium <PAM1> 772.85 -15.40 -2.0% -3.8%
Gold <XAU=> 1451.40 -15.35 -1.0% 2.3%
Silver <XAG=> 39.97 -0.20 -0.5% 29.5%
Platinum <XPT=> 1774.49 -5.81 -0.3% 0.4%
Palladium <XPD=> 768.00 -13.35 -1.7% -3.9%
Gold Fix <XAUFIX=> 1450.50 -10.75 -0.7% 2.9%
Silver Fix <XAGFIX=> 40.44 -93.00 -2.2% 32.0%
Platinum Fix <XPTFIX=> 1785.00 5.00 0.3% 3.1%
Palladium Fix <XPDFIX=> 783.00 2.00 0.3% -1.0%
(Additional reporting by Amanda Cooper in London and Lewa
Pardomuan in Singapore; Editing by Dale Hudson)
