Precious metals slide as oil weakens, dollar firms
Precious metals prices fell across the board on Monday, with silver tumbling 10 percent, as oil fell in the wake of OPEC’s decision to defer a production cut, and the dollar strengthened against the euro.
Gold slipped more than four percent to its weakest level since Nov 21, while platinum and palladium tumbled eight percent each as investors fretted over the outlook for demand.
Spot gold hit a session low of $776.80 an ounce and was quoted at $782.80/785.30 at 1445 GMT, down from $813.00 an ounce late on Friday. Silver fell to a low of $9.15 and was later trading at $9.35/9.43, down from $10.26 on Friday. Oil prices fell more than seven percent after OPEC opted to wait until mid-December to cut output at a meeting in Egypt at the weekend. Gold tends to move in line with crude because it is bought as a hedge against oil-led inflation and weaker oil prices undermine interest in commodities as an asset class.
The dollar, the other main external driver of gold, firmed 0.8 percent against the euro amid expectations of a half-point rate cut from the European Central Bank on Thursday. Euro zone manufacturing activity fell to a record low in November and the outlook remains grim, private sector data showed. A spate of US economic data due this week is likely to affect currency markets and the precious metals. Platinum slipped nearly eight percent as weak Japanese auto sales data emphasised poor demand from carmakers. Spot platinum slipped to a session low of $798.50 an ounce, and was later trading at $804.50/824.50, against $871.50 an ounce late on Friday. Sister metal palladium fell 8 percent to $170.50/178.50 from $186.50. reuters
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