Friday, July 27, 2007


NEW YORK, Jul. 27, 2007 (AP Online delivered by Newstex) -- Gold prices slipped Friday for the third straight session, weakened by jitters about the stock market's drop and the dollar's recovery against the euro.

Most industrial metals also fell, and agricultural futures ended narrowly mixed, but energy prices soared due to speculative trading and signs that the U.S. economy may be growing faster than expected. Crude oil ended a penny away from its all-time high.

Though the widespread selloff in the stock market, driven by concerns that a credit crunch could trip up the U.S. economy, couldn't cap oil prices, it managed to dampen precious metals. The Dow Jones industrial average plunged more than 300 points Thursday and made a 200-point drop Friday. Instead of gold, investors stuck to Treasury bonds, considered one of the most secure assets in volatile times. As bond prices rose, the 10-year Treasury note's yield fell to 4.77 percent from 4.79 percent Friday.

'It's been a long time since gold has acted as a safe haven,' said Leonard Kaplan, president of commodities futures brokerage Prospector Asset Management.

Investors also fled to the struggling dollar, which has been rebounding from a record low Tuesday against the 13-nation euro. The U.S. currency lifted to a two-week high versus the euro Friday when the U.S. government estimated the nation's gross domestic product rose by 3.4 percent in the second quarter, the strongest pace in over a year. When the dollar rises, gold tends to fall.

Gold for August delivery fell $2.70 to settle at $660.10 an ounce on the New York Mercantile Exchange. Gold has lost nearly $25, or 3.6 percent, this week.

Jon Nadler, analyst at Kitco Bullion Dealers, pointed out that the metal has given up two-thirds of the gains it made since July 5. 'Conditions turned on a dime this week, revealing just how interrelated gold really is to other financial markets now that institutional players are part of the market's fabric,' Nadler wrote in a note.

September silver dropped 23.5 cents to end at $12.715 an ounce, and October platinum lost $41.40 to finish at $1,286.70 an ounce.

Meanwhile, energy prices rebounded after falling a day earlier. The oil market, like the stock market, has recently been seeing volatile price swings as investors try to figure out which markets might still be lucrative if the lending climate worsens.

Light, sweet crude for September delivery surged $2.07 to settle at $77.02 a barrel on the Nymex _ one cent below the record close reached July 14, 2006. Crude has risen nearly 2 percent this week.

August gasoline futures rose 2.58 cents to settle at $2.1017 a gallon, while August natural gas futures rose 16.7 cents to settle at $6.110 per 1,000 cubic feet.

Overseas, most industrial metals fell on the London Metal Exchange.

'The impact of bullish economic data and ongoing labour problems was offset by trade and fund selling and ongoing equity market jitters,' wrote BNP Paribas (OOTC:BPRBF) analyst David Thurtell in a note.

Aluminum rose, but lead, nickel, zinc and copper fell on the LME.

September copper on the Nymex rose 2.45 cents to finish at $3.5470 a pound Friday, but it is down 4 percent on the week.

Meanwhile, on the Chicago Board of Trade, wheat for September delivery rose 2.25 cents to close at $6.5325 a bushel; December corn rose 3.50 cents to $3.3650 a bushel; and November soybeans fell 6 cents to $8.4050 a bushel.

Wheat is up 6 percent for the week; corn is up 0.9 percent, and soybeans are down 4 percent. Recently, wheat has seen the biggest gains among the agricultural futures, as this year's weak crop arrived amid strong demand. The country's corn and soybean crops have been hearty.

Newstex ID: AP-0001-18481048


Delivered by Newstex LLC
via theFinancials.com