* Gold drops toward $920 on commods weakness, dollar rise
* Bullion ends Q2 less than $10 higher vs Q1
* Royal Canadian Mint reports 17,500 ounces gold missing
(Recasts, updates with quotes, closing prices, changes
dateline, previous LONDON)
By Frank Tang
NEW YORK, June 30 (Reuters) - Gold futures tumbled below
$930 an ounce on Tuesday as a stronger dollar prompted
broad-based selling across the commodities sector, and better
macroeconomic sentiment could further decrease safe-haven
buying in the metal.
Bullion ended the second quarter less than $10 above its
first-quarter close, as signs of global economic stability
offset demand for gold as a hedge against long-term inflation.
Zachary Oxman, managing director with California-based
TrendMax Futures, said investors took profits on the last day
of the quarter following a period of solid gains across the
commodities group.
"What you are going to see is a sell-off in commodities,
and gold is going to be dragged down by it. It's nothing
fundamental about the gold market itself," Oxman said.
U.S. August futures <GCQ9> settled down $13.30, or 1.4
percent, at $927.40 an ounce on the COMEX division of the New
York Mercantile Exchange.
Spot gold <XAU=> traded at $926.50 at 2:16 p.m. EDT (1816
GMT), down from its previous close of $937.05. Bullion's
intra-day low of $922.60 was the lowest since June 24. Gold
closed at $917.15 on March 31.
The precious metal reversed gains when the dollar <.DXY>,
which has been under pressure, gained after an unexpected drop
in U.S. consumer confidence data. []
"Obviously, in these days where everything is linked
together, from crude prices to the price of gold, any change to
people's view of the economy and inflation expectations will
cause a reaction," said Ole Hansen, an analyst at Standard
Bank.
Investors view gold as an insurance against the falling
value of their dollar-denominated portfolio.
The Reuters/Jefferies CRB <.CRB> index of commodities
prices dropped nearly 2 percent, led by a sharp decline in
crude oil futures. <CLc1>
INFLATION IN FOCUS?
Matthew Turner, an analyst at VM Group, said gold investors
seemed to be focusing more intently on long-term inflation
expectations than recession fears, which would strengthen the
link between crude and bullion prices.
"But there are no immediate signs of inflation anywhere for
now, so investors are looking to the long term, and of course
when inflation does start to go up, the price of gold will be
rising well ahead of it," he said.
In official gold sector news, the Royal Canadian Mint is
missing about C$18.8 million ($16.2 million) worth of gold and
has not ruled out theft even as it continues to try to solve
the mystery, according to an official on Tuesday.
[]
An independent review of the Mint's records found a
discrepancy of 17,500 troy ounces of gold.
In other precious metals, spot silver <XAG=> was lower at
$13.55 against $13.84 on Monday, platinum <XPT=> fell to
$1,172.00 from $1,182.00 previously, and palladium <XPD=> was
at $246 against its previous finish at $247.00.
(Additional reporting by Nick Vinocur, Humeyra Pamuk and
Pratima Desai; editing by Jim Marshall)
Close Change Pct 2008 YTD
Chg Close Pct Chg
US gold <GCQ9> 927.40 -13.30 -1.4 884.30 4.9
US silver <SIU9> 13.600 -0.375 -2.7 11.295 20.4
US platinum <PLV9> 1185.30 -7.90 -0.7 941.50 25.9
US palladium <PAU9> 250.95 -0.40 -0.2 188.70 33.0
Prices at 2:17 p.m. EDT (1817 GMT)
Gold <XAU=> 926.50 -10.55 -1.1 878.200 5.5
Silver <XAG=> 13.55 -0.29 -2.1 11.30 19.9
Platinum <XPT=> 1172.00 -10.00 -0.8 924.50 26.8
Palladium <XPD=> 246.00 -1.00 -0.4 184.50 33.3
Gold Fix <XAUFIX=> 934.50 -1.00 -0.1 836.50 11.7
Silver Fix <XAGFIX=> 13.940 -0.130 -0.9 14.760 -5.6
Platinum Fix <XPTFIX=> 1186.00 0.00 0.0 1529.00 -22.4
Palladium Fix <XPDFIX=> 249.00 0.00 0.0 365.00 -31.8
------------------------------------------------------------
Prices in dollars per ounce.
2008 close for U.S. gold second contract month, U.S. silver and
palladium third contract months and U.S. platinum fourth
contract month.
