Gold eases from three-week high


LONDON - Gold prices eased in Europe on Thursday as the U.S. dollar rose against the euro, with investors taking profits in commodities and higher-yielding currencies after their recent gains.

Spot gold was at $1,130.65 (U.S.) an ounce at 1035 GMT, against $1,137.90 late on Wednesday.

Prices climbed 4 per cent in the first three trading sessions of the year to a three-week high of $1,140.20 an ounce, but struggled to maintain traction as the dollar recovered. Analysts say the market is now consolidating at these levels.

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Among other precious metals.

Silver was bid at $18.08 an ounce against $18.18.

Platinum was at $1,537 an ounce against $1,555 .

Palladium at $421 against $426.

Platinum and palladium both hit their highest in more than a year on Wednesday, lifted by expectations new exchange-traded products backed by the metals will shortly be launched in the United States, and hopes for a recovery in car demand.

Over half the world's platinum and palladium supply is consumed by carmakers for use in catalytic converters.

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Oil prices fell back below $83 a barrel, pulling back from the 15-month high hit a day earlier, while copper prices fell from a 16-month peak.

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Copper falls on worries over China

LONDON - Copper fell on Thursday after hitting a 16 month high as the dollar strengthened, caution set in ahead of Friday's U.S. payrolls data and traders worried about possible monetary tightening in China.

Benchmark copper for three-months delivery on the London Metal Exchange traded at $7,610 (U.S.) a tonne at 1027 GMT from a close of $7,660 on Wednesday. Earlier, prices of the metal used in power and construction hit $7,796, a level not seen since August 2008. The People's Bank of China unexpectedly raised auction yields of its three-month bills for the first time since mid-August, seen as a significant step-up in liquidity tightening.

"It's in the background but if it was having a devastating impact on sentiment you might expect weaker prices," said Leon Westgate, analyst at Standard Bank.

Ample liquidity, together with strong buying from China, the world's largest metals consumer, has helped fuel copper's stellar 140-per cent rise in 2009.

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Among other industrial metals.

Aluminum , used in transport and packaging, was at $2,355 from $2,385. Stocks fell 4,450 tonnes but remained near a record 4.6 million tonnes.

"In the mid-term (1-2 years) we are hard pushed to get excited by aluminum and believe prices need to fall substantially in 2010 to force supply discipline," said Bernstein Research in a note.

Zinc was at $2,676 from $2,718, having earlier hit $2,736, its highest since March 2008, while battery material lead was at $2,615 from $2,680.

The two metals rallied on Wednesday amid talk that several lead and zinc mines in Inner Mongolia, a region that produces 20 per cent of China's mined lead and zinc, were temporarily shut.

Tin was at $17,600 from $17,800, having earlier hit $17,850, its highest since October 2008, while steel making ingredient nickel was at $18,846 from $19,155. LME nickel stocks rose 426 tonnes to hit a new record 158,814 tonnes.

"Nickel is most vulnerable to a correction should you get a correction across the rest of the sector. It has a huge overhang of stocks (and) around 18 per cent of capacity could be brought back on line," said Mr. Major.

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http://www.kitcometals.com/charts/

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Have a great Day

........RL