(Recasts, adds quote, closing prices, market activity, NEW
YORK to dateline)
By Frank Tang and Atul Prakash
NEW YORK/LONDON, April 18 (Reuters) - Gold ended 3 percent
lower on Friday, trading at a one-week low as the dollar jumped
and investors dumped safe-haven gold and added positions in
riskier bets including stocks and crude oil, traders said.
"You see the stock market and crude pushing strong today.
It just seems to me that the risk appetite of the market is
back, and people are going full steam out of the safe haven
place and right back into the risky place," said Zachary Oxman,
senior trader of Wisdom Financial in Newport, California.
The metal <XAU=> fell as low as $904.35 an ounce and was at
$916.40/917.20 by New York's last quote at 2:15 p.m. EDT (1815
GMT), against $938.90/939.70 late on Thursday, when it hit a
three-week high.
Oxman said he expected gold could drop below $900 before
bouncing back to above the $960 to 970 an ounce area in the
second half of the year.
The dollar rose broadly after Citigroup's earnings sparked
hope the credit crisis may be nearing an end, weighing heavily
on bullion.
"Precious (metals) are all tracking the dollar," said David
Thurtell, analyst at BNP Paribas. "Investors who have been
seeking the relative safety of commodities have unwound some of
that long position to get back into equities."
A rising dollar makes dollar-denominated gold more
expensive for holders of other currencies. The metal,
traditionally seen as a safe-haven asset and a hedge against
oil-led inflation, often thrives on bad news.
Oil recovered to set a record high $117 a barrel, after
falling more than $2 a barrel on worries about a possible
slowdown in China, the world's second biggest energy consumer.
Looking ahead, traders said bullion markets were waiting
for a meeting of the U.S. Federal Reserve later this month.
Further aggressive interest rate cuts in the United States
could hit the dollar and boost gold prices.
"We continue to find gold uninspiring at the moment and are
disappointed that the metal is so far off its recent all-time
high," said John Reade, analyst at UBS Investment Bank.
"While some long liquidation has occurred and jewellery
demand has reappeared, neither of these indicators is telling
us that gold is a raging tactical buy."
RISK APPETITE
Huge writedowns from U.S. banks have undermined the health
of the U.S. economy, and sentiment towards the dollar.
But some banks and analysts are now saying the worst of the
turmoil that has plagued financial markets since last August
could be coming to an end.
"The increasing risk appetite of investors could lead to
shifts of assets into stock markets, which might be negative
for gold," analysts at Dresdner Kleinwort said in a report.
Palladium <XPD=> was down at $450/455 per ounce against
$458/463 late in New York, and silver <XAG=> fell more than 3
percent to $17.87/17.92 an ounce from $18.23/18.28 late in the
U.S. market on Thursday.
Platinum <XPT=> fell more than 1 percent to a low of $2,017
an ounce before rising to $2,035/2,050, versus $2,042/2,052
late on Thursday.
(Additional reporting by Pratima Desai and Alastair Sharp in
London; Editing by Christian Wiessner)
