By Veronica Brown
LONDON, March 20 (Reuters) - Investors called time on the
rush to commodities on Thursday with repatriated profits lifting
an ailing dollar, while stock markets saw seepage as bank stress
dominated sentiment with a profit warning from Credit Suisse.
Flagship precious metal gold tumbled to a one-month low as
funds cashed in on a surge that had taken bullion to a record
high above the $1,000 milestone.
Spot metal <XAU=> fell as low as $911.80 per troy ounce from
$944.20/945.00 quoted late in New York on Wednesday and well
away from Monday's record $1,030.80.
Similarly, oil <CLc1> and base metal price losses deepened
on fears that global consumption could contract if the United
States slipped into recession.
Analysts said hefty profits seen in commodities markets
already this year were proving too hard to resist in the current
uncertain global climate.
"Since August 2007 when we all first learnt what subprime
meant, gold has risen by close to 50 percent. So it's no
surprise that it's given back some of that money," said Ross
Norman, Managing Director of TheBullionDesk.com.
"Anyone who bought gold has been rewarded with a very
healthy return. There's a temptation to take profit, people have
done so and it's quite healthy," he added.
The drive out of commodities revived the fortunes of a
sickly dollar as investors repatriated profits, helping lift the
U.S. currency further from this week's record lows versus the
euro and a basket of major currencies.
Analysts said it was too early to call an end to the dollar
rout which has also seen it sink to record lows versus the Swiss
franc as well as 13-year troughs against the yen.
"After the extreme moves in currencies over the past week
and now that we are approaching this long weekend, it's a good
opportunity to take profit if you have some," said Johan Javeus,
FX strategist at SEB in Stockholm.
"But I would see this as a temporary (move) since we expect
that the Fed will go on cutting. I don't think we've seen the
lows for the dollar and I don't think we've seen the low for
stock markets. It's unlikely that this will be the bottoming out
for risk aversion," he added.
By 0954 GMT, the euro was down 1 percent at $1.5462, well
off Monday's record high of $1.5904 but still 6 percent higher
than at the end of last year <EUR=>.
The dollar also gained 1.3 percent to 100.16 yen <JPY=> and
rose back above parity versus the Swiss franc to 1.0147 francs
<CHF=>.
STOCKS SLIDE
Derailed basic resource prices helped drive mining and
energy stocks lower, but the ongoing global crisis in credit
markets was the biggest underlying factor behind market jitters.
Credit Suisse shares <CSGN.VX> were down 8.8 percent after
the Swiss bank cautioned it was unlikely to be profitable in the
first quarter due to big debt writedowns.
German insurer Allianz fell after it gave a bearish outlook
for this year and next, saying its goal to increase operating
profit by an average 10 percent had become more difficult.
"Markets are very nervous. We remain negative. As soon as
there is another negative piece of news, stock markets react
accordingly," said Anne-Kristin Yasuda, strategist at Landesbank
Berlin.
The pan-European FTSEurofirst 300 index <> was down
0.6 percent at 1,222.27 points, having already lost roughly 2.5
percent so far this week.
The MSCI's measure of Asian stocks outside Japan
<.MIAPJ0000PUS> was down 2 percent at 427.71.
"The market is still driven by uncertainty," said Britta
Paech, portfolio manager at M.M. Warburg. "We continue to battle
with the financial crisis and it'll stay that way for a while,"
she added.
(Additional reporting by Eva Kuehnen in Frankfurt and Toni
Vorobyova in London, Editing by Chris Pizzey)
