USD 63.8487

0

EUR 70.5975

0

BRENT 64.63

0

AI-92 42.32

-0.06

AI-95 45.99

-0.12

AI-98 51.63

-0.23

Diesel 46.05

-0.11

10

Gold Falls as Crude Oil Declines, Easing Concern Over Inflation

Gold fell for the first trading session in six in London

Gold fell for the first trading session in six in London as energy prices declined, eroding the appeal of the metal as a hedge against inflation.

Bullion has dropped by a fifth since trading at a 26-year high of $730.40 an ounce on May 12, partly as crude oil plunged from a record. Oil tumbled on expectations a U.S. Energy Department report tomorrow will show motor-fuel supplies rose for a sixth week, gaining 800,000 barrels, according to a Bloomberg News survey.

``Things are risky on the downside,'' said David Holmes, director of precious metals at Dresdner Kleinwort Group in London. ``If oil declines below $60 a barrel, gold will follow.''

Gold for immediate delivery fell $1.50, or 0.3 percent, to $589.30 an ounce at 11:35 a.m. in London. Gold for December delivery on the Comex division of the New York Mercantile Exchange dropped $1.40, or 0.2 percent, to $594.50.

Crude declined 0.7 percent to $61 a barrel on Nymex. It fell below $60 yesterday to a six-month low of $59.52.

Some investors buy gold when energy costs climb. Gold futures reached a record $873 an ounce in January 1980 when oil costs doubled in a year, sparking a surge in inflation.

The correlation between oil and gold is 0.55 this year while that between gold and the trade-weighted basket value of the dollar against six major currencies is 0.47.

Palladium rose $2 to $317 an ounce. Platinum dropped $4 to $1,127.50 and silver fell 7.5 cents to $11.17.