Gold, platinum strike 8-mth low surging dollar

Gold tumbled to its weakest in almost eight months in volatile trade on Tuesday, losing its safe haven appeal as investors shifted some of their money back into the U.S. dollar and oil further retreated from record highs.
Platinum and silver also dropped to their lowest level since December to track gold, while thinly-traded palladium hit its weakest since mid-November 2006. Panic selling hit Tokyo, where platinum and gold futures sank by their daily limit down.
Gold hit an intraday high of $825.85 before falling all the way to $801.90 an ounce, its lowest level since late December, as the euro struck a six-month low against the dollar.
Spot gold was last trading at $804.65/805.65 an ounce, well below an all time high of $1,030.80 hit in March.
"Frankly speaking, the way its dropping, I think $800 will be taken out very soon. Just look at the rise in the dollar and plunge in the euro. Gold's decline is quite justifiable,"
said Adrian Koh, analyst at Philip Futures in Singapore.
The euro fell to a six-month low against the dollar as mounting signs of economic difficulties in Europe, Asia and Australia diminished prospects of higher interest rates outside the United States, boosting demand for the dollar. The dollar index which measures the greenback against a basket of six currencies, hit a six-month high of 76.428. Oil was down 51 cents to $113.95 a barrel.
"Gold has broken the chart points and everybody is rushing to sell their gold. It seems to be very bad. We are waiting for gold to hit $800," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
Despite a sharp drop in prices, physical demand from jewellers was limited, he said. "It's moving too fast and scares off physical buyers," said Leung, who pegged downside at $785.
Platinum fell to $1,470/1,490 an ounce from 1,517/1,537 an ounce, having hit an intraday low of $1,468 an ounce.
"With everything falling, I guess platinum will follow suit. I am currently looking at the $1,400 levels for support," said Koh of Philip Futures. Platinum prices have taken a dramatic turn since spiking to a record high at $2,290 an ounce in early March, losing much of their gains to profit taking and a slowing U.S. economy that threatens to slash demand for autocatalysts. The bulk of the world's platinum is used by automakers in autocatalyst systems that scrub exhaust fumes of dangerous and environmentally damaging chemicals.
Silver dropped to $14.07/14.13 an ounce from $14.65/14.71 an ounce, while palladium fell to $309.50/317.50 an ounce from $317.00/325.00 late in New York. (Reuters)