Business, Business News - Posted by Andy Barck on Saturday, August 16, 2008 19:19 - 0 Comments

Gold falls below to $800 an ounce

Gold fell to below $800 an ounce for the first time since December 2007 while aluminium prices hit their lowest in some six months. Copper also fell.

The price of commodities has fallen on speculation that demand will slow amid a global slowdown.

Another factor has been the stronger dollar, which has reached a half-year high against the euro.

As economists see improved prospects for the US economy, the dollar becomes more attractive as an investment.

And as the dollar becomes more attractive, particularly in times of crisis, gold has lost its lustre, as have other precious metals.

Commodity sell-off

Industrial metals have been hit even harder.

Three-month copper dropped to $7,360 a tonne by the close of New York trading.

The metal, which is largely used in the building sector, had fallen to its lowest in six months in earlier trade at $7,120.

"There is still scope for copper prices to fall another 10%, or so," said Daniel Brebner of UBS.

"Part of that is the function of China’s growth slowing," he added.

Oil was also down, after oil producer group Opec forecast lower demand for the fuel.

US sweet, light crude oil slipped $1.25 to $113.76 a barrel after earlier falling as low as $111.34 a barrel. Brent oil prices also fell, down 19 cents to $112.45 a barrel.

"Worries about an economic slowdown in the US and Europe, and even Japan, are weighing on the oil market," said Victor Shum, an analyst with consultancy Purvin & Gertz.