Currency Uncertainty Limits Gold’s Losses
Undated (AP) _ Gold futures prices fell Monday as world currencies stabilized, but the losses were limited by uneasiness about European unity and speculation that the future holds higher inflation.
Other precious metal prices also fell. On other commodity markets, energy futures were mixed; livestock and meat futures were mixed; and grains and soybeans were mostly higher.
Gold for October delivery dropped $3.70 on New York’s Commodity Exchange to $347.80 a troy ounce. Gold’s price rose more than $10 an ounce last week as investors took refuge from the chaotic currency markets in precious metals.
September silver deliveries dropped 4 cents to $3.807 a troy ounce on the Commodity Exchange; October platinum slid $1.90 on the New York Mercantile Exchange to $363.70 a troy ounce.
Analysts predicted last week that gold would quickly give back all its gains following Sunday’s French vote on European unity. But France’s whisker- thin endorsement of the treaty underscored the divisiveness that exists on the subject of European unification.
″It’s a very unstable situation. Nobody’s satisfied that this is the end of the debate as to the interrelationship among the countries,″ said Bette Raptopoulos, metals analyst with Prudential Securities Inc. in New York.
She said the market didn’t know what to make of President Bush’s suggestion that one way to alleviate turmoil in currency markets would be to use a basket of commodities, including gold, to help determine the value of major currencies.
″It’s not clear what that was all about,″ she said.
Gold’s losses also were limited by prospects for lower interest rates worldwide as industrialized nations renew their efforts at economic revival, said Martin Reichenberg, manager of trading services with Pegasus Econometric Group in Hoboken, N.J.
″Down the road that’s going to be inflationary,″ he said. Investors typically view gold as a hedge against inflation.
Crude oil futures edged lower and refined products ended mixed on the New York Mercantile Exchange as traders continued to assess last week’s OPEC decision to keep crude production steady. Natural gas futures surged amid continuing worries about reduced production from the Gulf Coast, where natural gas facilities were damaged last month by Hurricane Andrew.
Light sweet crude oil for October delivery fell 6 cents to $21.92 a barrel; October unleaded gasoline fell .81 cent to 58.31 cents a gallon; October heating oil rose .34 cent to 62.17 cents a gallon; October natural gas rose 12.4 cents to $2.452 per 1,000 cubic feet.
Cattle futures ended mostly lower on the Chicago Mercantile Exchange. December live cattle deliveries rose, though, in reaction to a government report Friday that showed fewer cattle were placed on feedlots in August in the seven largest cattle states than traders expected. That could result in a reduced supply of slaughter-ready animals by December.
Pork futures rose amid expectations for higher hog prices in coming days.
Live cattle for October delivery slipped .10 cent to 75.77 cents a pound; September feeder cattle ended .10 cent lower at 84.52 cents a pound; October feeder live hogs rose .63 cent to 41.15 cents a pound; February frozen pork bellies rose .35 cent to 41 cents a pound.
Grain and soybean futures prices ended mostly higher on the Chicago Board of Trade as Russia submitted a new bid for U.S. wheat and rain slowed the Midwestern harvest.
All contracts for September delivery expired at midday. At expiration, September wheat was down 1 1/4 cents at $3.30 3/4 a bushel; September corn was off 6 1/4 cents at $2.16 1/4 a bushel; September oats were up cent at $1.44 3/4 a bushel; and September soybeans were up 1 cents at $5.53 3/4 a bushel.
December wheat rose 1/2 cent to settle at $3.42 3/4 a bushel; December corn rose 1/4 cent to $2.16 1/4 a bushel; December oats fell 1/2 cent to $1.38 1/4 a bushel; November soybeans rose 2 1/4 cents to $5.44 a bushel.