Published: Friday October 16, 2009 MYT 9:31:00 AM
Updated: Friday October 16, 2009 MYT 9:32:21 AM

Gold retreats from recent highs as US$ gains

NEW YORK: Gold retreated from its record highs Thursday as the dollar regained ground against other currencies.

Gold for December delivery gave up $14.10 to settle at $1,050.60 an ounce on the New York Mercantile Exchange.

Meanwhile, the ICE Futures U.S. dollar index rebounded from 14-month lows. The widely used measure of the dollar inched up 0.2 percent in afternoon trading.

Investors tend to flock to gold when the greenback is weak, as the precious metal provides shelter from inflation.

However a government report Thursday suggested that inflation is still relatively subdued, which weighed on gold prices.

The Labor Department said its consumer price index rose a slight 0.2 percent in September, in line with what analysts were expecting.

Prices excluding energy and food were also up 0.2 percent, slightly more than analysts forecast.

Investors have been worried about the potential for inflation as the dollar continues to weaken and with little chance that the Federal Reserve will raise interest rates in the near future.

The U.S. dollar index has fallen 6.5 percent since early July.

Gold prices, conversely, are up 15.5 percent since then.

Gold reached another high of $1,072 an ounce on Wednesday.

Other precious metals fell Thursday alongside the dollar.

December silver dropped 49.3 cents to $17.4150 an ounce, while October platinum lost $10.10 to $1,348.50 an ounce.

Bucking the trend, December copper futures rose 1.45 cents to $2.8590 a pound as a report on manufacturing in the New York showed activity has picked up in October.

Elsewhere on the Nymex, energy prices shot higher after the government reported a surprise drop in gasoline supplies.

The Energy Information Administration said gasoline in storage fell by more than 5 million barrels when most energy experts expected supplies to grow yet again.

Light, sweet crude for November delivery jumped $2.40, or 3.2 percent, to $77.58 a barrel - its highest close of the year.

Gasoline futures rose 8.74 cents, or 4.7 percent, to $1.9449 a gallon, while heating oil futures rose 7.54 cents, or 3.9 percent, to $2.0181 a gallon.

Among soft commodities, December cocoa futures rose $118 to $3,267 a ton, while December coffee fell 1.5 cents to $1.3775 a pound.

On the Chicago Board of Trade, December wheat futures fell 8 cents to $5.05 a bushel, while corn for December delivery lost 10 cents to $3.73 a bushel.

November soybeans fell 11 cents to $9.83 a bushel. - AP

Gold futures trading on the NY Merc Thursday: (100 troy oz.; dollars per troy oz.)

Open High Low Settle Change

Oct 1062.20 1062.20 1048.00 1049.80 Down 14.10

Nov 1051.20 1065.70 1048.10 1050.00 Down 14.10

Dec 1049.30 1066.80 1047.40 1050.60 Down 14.10

Feb 1050.90 1067.40 1048.90 1051.80 Down 14.20

Apr 1051.80 1068.90 1051.60 1052.90 Down 14.20

Jun 1054.00 1069.40 1052.30 1054.00 Down 14.30

Aug 1054.60 1064.90 1054.50 1055.50 Down 14.40

Oct 1057.50 Down 14.40

Dec 1073.60 1075.80 1056.90 1059.80 Down 14.40