By Frank Tang & Jon Harvey
NEW YORK/LONDON (Reuters) - Gold ended 1 percent lower on Wednesday as the dollar climbed, oil prices feel and U.S. stocks rose, denting the precious metal's appeal.
Gold was at 918.80/920.30 by New York's last quote at 2:15 p.m. EDT, down from $928.45/929.65 late in New York on Monday.
Gold's decline was "pretty much forex related, and oil is coming down," said senior Commerzbank trader Michael Kempinski. "We need to see come stronger commodities in general, and a stronger euro, to push gold higher again."
The dollar rose to its highest level in a month against major currencies, pressuring bullion prices. Gold tends to move in the opposite direction of the U.S. currency, as it is often bought as an alternative investment.
Declining oil prices also dragged gold, as signs of weakening demand for crude and a rising dollar outweighed the supply threat linked to tensions in Iran and Nigeria. U.S. crude futures ended $2.54 lower at $122.19 a barrel.
Gold also dipped as U.S. stocks ticked up, dampening interest in the precious metal as an alternative investment.
"When crude oil goes down, gold also goes down with the stock market going up. Everyone is watching that correlation," said Adam Hewison, president of MarketClub.com in Annapolis, Maryland.
Hewison said gold should find support at current levels, but the $905 to $912 an ounce area represented a key support area. Should bullion fail to hold there, prices could test the lows set in June below $860 an ounce, he said.
Absent significant moves in oil and the dollar, gold prices should remain rangebound, analysts said, with physical buying muted during the low-demand summer season and exchange-traded funds' holdings steadying after recent gains.
U.S. gold futures for August delivery settled down $11.20, or 1.2 percent, at $916.50 an once on the COMEX division of New York Mercantile Exchange.
Gold traders awaited release of U.S. economic data this week, including GDP numbers on Thursday and nonfarm payross, construction spending and auto sales data on Friday. These reports could have a significant impact on the dollar.
Traders also looked ahead to Wednesday's oil inventory data from the U.S. Department of Energy.
"The consensus is looking for another drop of crude oil inventories, which might provide some support for crude oil and thus also for gold," said Dresdner Kleinwort analyst Peter Fertig.
Among other precious metals, spot platinum hit its highest level in almost a week at $1,775 an ounce, then retreated to end at $1739.00, down from $1,739.00/1,759.00, down from $1,763.00/1,783.00 late in New York on Monday.
Spot palladium was at $380.50/388.50, unchanged from late in New York on Monday. Silver fell to $17.35/17.41 an ounce from $17.46/17.52 late in New York on Monday.
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See original Reuter's article here: http://www.guardian.co.uk/business/feedarticle/7690017
Well one can never be so sure about gold rise and fall, like few months back it fell from 1030 to all the way 845 .
gold will not fall down its strong support of 885.0
Another chance to short OIL (USO) this week...
GOLD AND EURO HAVE MOVED IN SYNK.
Hmmm! "sport platinum", a new level of award for the Beijing Olympics perhaps?