* Rising risk aversion after Goldman charges batters commods
* Oil slides below $82/bbl, copper, aluminium slip
* Dollar benefits from news, further pressuring gold
(Updates, adds comment, changes dateline from SINGAPORE)
By Jan Harvey
LONDON, April 19 (Reuters) - Gold fell more than 1 percent
in Europe on Monday to its lowest in nearly two weeks as news
that the U.S. authorities have charged Goldman Sachs with fraud
hurt commodities but lifted the dollar.
Goldman Sachs <GS.N> was charged on Friday with fraud by the
U.S. Securities and Exchange Commission over its marketing of a
subprime mortgage product, sparking an immediate slide in assets
seen as higher risk, like equities and commodities.
Spot gold <XAU=> hit a low of $1,123.15 and was bid at
$1,125.50 an ounce at 0924 GMT, against $1,136.45 late in New
York on Friday.
Commodities tumbled across the board on Friday after the
news, and most are extending those losses on Monday, with oil
falling more than 2 percent and copper sliding to three-week
lows. [] []
"There are concerns about Goldman Sachs," said Citigroup
analyst David Thurtell. "There was a bit of a rush for the
exits...people with long positions who are watching their
profits disappear just want to get out and reassess."
U.S. gold futures for June delivery <GCM0> on the COMEX
division of the New York Mercantile Exchange fell $10.50 to
$1,126.40 an ounce.
Currency effects also weighed on gold, as the dollar <.DXY>
strengthened broadly. Rising risk aversion weighed on higher
yielding currencies like the euro, with lingering concerns over
Greece's debt levels also pressuring the single currency. []
Strength in the U.S. unit curbs gold's appeal as an
alternative asset and makes dollar-priced commodities more
expensive for holders of other currencies.
Germany and the U.K. are set to seek details from the SEC
about the activities of Goldman Sachs as a prelude to potential
legal steps following a U.S.-led fraud investigation.
"In the near term, we expect the developments surrounding
Goldman to overshadow all other issues that previously dominated
gold trading, including the pace and tempo of the economic
recovery and its impact on monetary policy (and) the possibility
of a CNY revaluation," said HSBC in a note.
STOCKS FALL
China's key share index fell nearly 5 percent on Monday, its
largest percentage loss since August, and Japan's Nikkei average
hit three-week lows. []
European shares also fell. In addition to Goldman, airline
stocks were hit by transport chaos as a cloud of volcanic ash
spreading from Iceland across Europe grounded planes. []
On the physical side of the market, holdings of the world's
largest bullion exchange-traded fund, New York's SPDR Gold Trust
<GLD>, were steady at record levels on Friday. []
However, a rapid rise in speculative net long positions in
New York gold futures is worrying some analysts.
"As we enter a new week, particularly following a negative
weekly close, the focus of investor positioning in the gold
market comes further under the spotlight," UBS analyst Edel
Tully said in a report on Monday.
"There is little doubt that such positioning is bordering on
crowded," she said. "So long as risk aversion remains in place,
the danger is that gold longs will run for the exit as fast as
they entered over the previous two weeks."
However, a price drop linked to a liquidation among
speculators may attract more physical investors back to the
market, she noted.
Other precious metals declined in line with gold, with
silver <XAG=> bid at $17.53 an ounce against $17.67.
Holdings of the largest silver ETF, the iShares Silver Trust
<SLV>, fell another 45.74 tonnes on Friday, bringing their total
decline this year to 580 tonnes, or 6 percent. []
Platinum <XPT=> was at $1,666.50 an ounce against $1,690,
while palladium <XPD=> was at $518 against $528.50.
(Editing by Sue Thomas)
