NEW YORK (AFX) - Gold and silver prices extended their correction lower Thursday from last month's all-time peak, as the dollar firmed and crude oil weakened.
August gold lost $18.80 to settle at $613.80 an ounce on the Comex division of the New York Mercantile Exchange. It bottomed at $613, its weakest level since April 13. Gold reached an all-time peak of $739.20 an ounce on May 12.
Meanwhile, July silver lost 81.5 cents to $11.075 an ounce, after hitting a low of $11.05 an ounce -- its weakest level since March 29.
'We have a really powerful move in the dollar today, which is continuing to wipe away (this spring's) gains in gold and silver,' said Jim Steel, metals analyst with HSBC. 'This is based on perceptions that the Fed's interest-rate tightening cycle isn't quite over yet and that the Fed is determined to fight inflation.'
As a result, funds have continued to liquidate positions in gold, Steel said. 'This is part of a retreat in the overall commodities complex,' he added.
The euro has fallen to a low for Thursday of $1.2627 from $1.2785 late Wednesday, and is now down roughly 3.5 cents since Monday's high. The European currency hit its weakest level since May 4.
Meanwhile, the dollar rose as high as 114.72 yen Thursday, from 113.59 yen late Wednesday. The U.S. currency's peak was its strongest level against the Japanese currency since April 27.
The dollar was supported this week by comments from Federal Reserve officials expressing concerns about inflation, beginning with a speech by Fed Chairman Ben Bernanke on Monday. This has led to expectations for more U.S. monetary tightening.
July platinum tumbled $41.40 to $1,190.10 an ounce, while September palladium lost $21.10 to $322.55 an ounce.
The benchmark July copper contract settled the day down 22.7 cents at $3.3570 per pound. The contract got as low as $3.34 per pound -- marking a low last seen on June 1.
Crude oil, meanwhile, weakened on news of the death of Abu Musab al-Zarqawi, al-Qaida's leader in Iraq, in a U.S. air strike in Iraq; word from Nigerian militants that they would release foreign hostages; and an easing of tensions over Iran.
The July crude oil contract closed down 47 cents at $70.35 a barrel after dropping as low as $69.10 a barrel.
July gasoline finished 2.18 cents lower at $2.1022 a gallon, well off its earlier low of $2.0450 a gallon.
July heating oil lost 0.98 cent to $1.9856 a gallon after hitting an earlier low of $1.9550 a gallon.
July natural gas rose 21.7 cents to settle at $6.191 a million British thermal units.
On the New York Board of Trade, July Arabica coffee ended 0.45 cent higher at 96.45 cents a pound.
The most-active July cocoa contract settled down $12 at $1,461 metric ton.
Raw sugar in foreign ports futures for July settled down 0.19 cent at 15.03 cents a pound.
On the Chicago Board of Trade, July corn declined 5.5 cents to $2.455 per bushel. July soybeans ended 9.25 cents lower at $5.8775 a bushel. July wheat ended down 4.25 cents at $3.835, with support holding at Wednesday's four-week low of $3.80.
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