(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, March 20 (Reuters) - Gold dropped more than 2
percent to its lowest level in a month on Thursday amid a
broad-based sell off in commodities and as funds cashed in
after pushing the metal to a record above $1,000 an ounce this
week.
Platinum, palladium and silver also dropped. New York's
COMEX gold futures fell more than 3 percent to hit their lowest
in more than four weeks, while Shanghai futures sank by their 5
percent limit.
Gold <XAU=> hit an intraday high of $943 an ounce before
changing course and tumbled to as low as $920.30 an ounce, down
from $944.20/945.00 late in New York on Wednesday and off
Monday's record high of $1,030.80 an ounce.
"We have to see whether the funds will continue selling. If
they do, of course there is a possibility that it will go down
and test $900," said Ronald Leung, director of Lee Cheong Gold
Dealers in Hong Kong.
A smaller-than-expected U.S. interest rate cut was an
excuse for the funds to exit gold and the absence of Japanese
speculators also exaggerated movements, said Leung.
Gold tumbled 6 percent on Wednesday, its biggest one-day
percentage drop in nearly two years as cash-rich funds exited
commodities, leading to declines in oil <CLc1>, base metals and
agricultural products. Trading was thin on Thursday as Tokyo
Commodity Exchange was closed for a national holiday.
"It is most probably liquidation on margin calls. It looks
like players are exiting the market after gold hit $1,030 level
and there's no reason for physical buyers to buy at high
levels," said a dealer in Singapore.
"Retailers are also starting to cash in. That's why I think
the market will still fall for another day. It's hard to say
where the support level is, but I think it's going to fall
below $900 today," he said.
The U.S. dollar was mixed as persistent credit concerns,
huge falls in U.S. bill rates and a sudden reversal in global
commodity prices all tugged in different directions.
[]
The Fed brought key interest rates to 2.25 percent on
Tuesday after cutting them by 0.75 percent, against market
expectations for a 1.0 percent cut.
Gold futures for April delivery <GCJ8> on the COMEX
division of the New York Mercantile Exchange fell $12.7 an
ounce to $932.9 an ounce, after hitting a low of $915.
"High caution is advised before fresh buying is attempted
as the market steps in to a long weekend starting today,"
Pradeep Unni, analyst at Vision Commodities in Dubai, said in a
note.
"The market has yet to show any clear signals of market
bottom. Also strong buying signals haven't been shown by
technical indicators that we closely follow," said Unni, who
pegged key support at $898 an ounce.
A decline in global economic growth in 2008-09 will mostly
dampen demand and prices for commodities if the slowdown is
substantial, the International Monetary Fund said on Wednesday.
[]
Spot platinum <XPT=> fell to $1,880/1,885 an ounce from
$1,900/1,910 -- off a record high of $2,290 hit on March 4.
Silver <XAG=> dropped to $17.99/18.04 an ounce from
$18.38/18.43 an ounce. Spot palladium <XPD=> fell to $444/451
an ounce from $455/460 an ounce.
The most active June contract <SHAUM8> on the Shanghai
Futures Exchange fell by 5 percent to 214.55 yuan a kilogram,
tracking declines in cash gold.
Precious metals prices at 0312 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 932.00 -11.50 -1.22 11.93
Spot Silver 18.01 -0.32 -1.75 21.94
Spot Platinum 1880.00 -20.00 -1.05 23.68
Spot Palladium 445.00 -10.00 -2.20 20.92
Euro/Dollar 1.5576
Dollar/Yen 99.12
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Tomasz Janowski)
