By Frank Tang and Julie Crust
NEW YORK/LONDON (Reuters) - Gold prices hit their lowest levels in more than a year on Thursday, briefly trading below $700 an ounce, as funds sold heavily to raise cash, but a reversal of the dollar’s strength lifted bullion off its session lows.
Platinum and palladium also dropped on worries over demand from automakers, who use the metals to make catalytic converters, as the stock markets remained extremely volatile.
Spot gold was at $713.65 an ounce at 2:40 p.m. EDT, down 1.9 percent from Wednesday’s close. Earlier it touched a low of $697.45, its weakest since September 2007.
“I still think it’s all about raising cash and capital preservation. The market is way too long,” said Bruce Dunn, vice president of trading at New Jersey-based Auramet Trading.
“All the mining companies are saying gold is going back to ОФИС-МЕНЕДЖЕР,000, but I think these people are living in la-la land. You’ve got a serious recession and people are not buying gold jewelry,” Dunn said.
Jewelry buying represents more than 60 percent of annual global gold demand. according to research firm GFMS.
“Funds are liquidating, trying to raise cash. Technically, we broke down yesterday below $738 (COMEX futures). I think people are getting short,” said one COMEX gold futures floor trader.
U.S. gold futures for December delivery settled down $20.50, or 2.8 percent, at $714.70 an ounce on the COMEX division of the New York Mercantile Exchange. Continued…
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