(Recasts, adds quotes, changes prices, dateline, pvs SINGAPORE)
By Atul Prakash
LONDON, April 14 (Reuters) - Gold fell more than 1 percent
on Monday as the dollar's rise against the euro after a Group of
Seven meeting lowered the metal's appeal as an alternative
investment.
Platinum, palladium and silver all fell by about 3 percent,
with platinum slipping below $2,000 an ounce and silver dropping
to a 10-day low.
Gold <XAU=> dipped to $914.10 an ounce before rising to
$920.50/921.20 at 1020 GMT, against $924.60/925.40 in New York
late on Friday. It hit a record high of $1,030.80 on March 17.
"Until the euro/dollar pair breaks out of its recent range
of $1.5550-$1.5860, the precious metals are also likely to
continue to tread water," said Tom Kendall, metals strategist at
Mitsubishi Corp.
"Bullion investors are still bullish over three to six-month
timeframe, but we would caution that further liquidation in
Asian equity markets could trigger another round of distress
selling in commodities in the near term."
Investors often sell profitable positions in commodities to
cover margin calls in other markets, such as equities.
Fallout from losses at General Electric and other factors
pointing to a U.S. recession hit global stock markets hard, with
Asian shares tumbling and European stocks dropping for the fifth
session in a row.
The dollar rose versus the euro after the Group of Seven
unexpectedly voiced concern about sharp swings in major
currencies, but gains were capped by persistent worries about
the health of the U.S. economy. The euro was last at $1.5808.
The language carried at least the implied threat that
authorities could step in to prop up the dollar through foreign
exchange intervention, traders and analysts said, although most
doubted that words would turn into action any time soon.
A firmer dollar makes gold costlier for holders of other
currencies and often lowers bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
Oil eased to trade around $110 a barrel.
TECHNICAL SELLING
A failure to stay above key technical level of $930 also
prompted selling from investors. They now await this week's U.S.
data, including retail sales, producer and consumer prices and
quarterly earnings by U.S. banks, for market direction.
But some analysts said gold might recover.
"Bargain buying could lift prices ahead of what promises to
be a nervous week. We see support for gold at $914, with $910
and $904 as possibilities," Standard Bank said in a report.
In other markets, U.S. gold futures for June delivery <GCM8>
fell $2.50 to $924.50 an ounce.
Platinum <XPT=> fell as low as $1,940 an ounce and was last
quoted at $1,948/1,958, against $2,002/2,007 late on Friday,
tracking weaker gold. It hit a record high of $2,290 on March 4.
But Citigroup Global Markets remained positive and raised
its platinum price forecast to $2,005 an ounce in 2008 and
$1,800 in 2009 from its earlier prediction of $1,696 and $1,500
an ounce respectively.
"The move in the platinum price above $2,000 during the
first quarter of 2008 has set a new benchmark for the metal
price in the near term, as fundamental (supply and demand) and
external market factors weigh heavily on uncertainty surrounding
the market for PGMs," it said in a market report.
Silver <XAG=> dropped to a low of $17.25 an ounce before
rising to $17.51/17.56 an ounce, against $17.75/17.80 in New
York. Palladium <XPD=> fell to $455/463 an ounce from $466/474.
(Reporting by Atul Prakash; editing by Chris Johnson)
