Gold Prices plunge, other metals drop (MarketWatch) (13-02-2008)

NEW YORK (MarketWatch) -- Gold futures closed sharply lower on Tuesday, on profit taking by traders.

Gold for April delivery declined $15.60 at $911.10 an ounce on the New York Mercantile Exchange. Other metals prices also posted steep losses.

According to media reports, the Group of Seven industrial nations approved over the weekend the sale of gold by the International Monetary Fund. The IMF is the third largest holder of gold in reserves after the U.S. Federal Reserve and the German central bank.

Prices had recently soared due to South Africa’s lower production, boosting in turn gold and platinum futures. South Africa is the world's second-largest gold producer and the biggest platinum producer.

The dollar slipped against most major counterparts Tuesday but gained on the yen as risk appetite returned, and stocks rose on news of Warren Buffett's proposed buyout of bond insurers' liabilities.

Also on Nymex, platinum futures hit another peak overnight before giving up their gains. Platinum for April delivery soared as high as $1,970.90 an ounce Tuesday. The contract finished down $17.60 at $1,921.80 an ounce.

March silver dropped 22 cents to $17.25 an ounce, March palladium declined $11.90 at $431.50 an ounce. March copper finished unchanged at $3.56 a pound.

Crude-oil futures fell for the first time in four sessions as estimates that U.S. crude inventories have risen for a fifth week overtook a possible escalation of the conflict between Venezuela and the U.S.

Indexes tracking mining and metals shares declined on Tuesday. The Philadelphia Gold and Silver Index fell 3.1% to 176.46 points and the Amex Gold Bugs Index dropped 3.5% to 429.94 points.

As for the sector's exchange-traded funds, the StreetTracks Gold Trust ETF dropped 2.4% to $89.10, the iShares Silver Trust ETF fell 2.1% to $170.33 and the Market Vectors-Gold Miners ETF declined 3.3% to $47.04.

Gold warehouse inventories rose by 5,202 troy ounces to stand at 7.6 million troy ounces, as of late Monday, according to Nymex data. Silver stockpiles declined to 133.2 million troy ounces, off 651,008 troy ounces, while copper supplies were unchanged at 13,978 short tons.

Source: MarketWatch