* Dollar firms versus euro amid flight to quality
* Economic woes hurt precious metals, commods complex
* CFTC plans to curb speculation pressure oil, energy
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, July 8 (Reuters) - Gold futures fell
toward $900 an ounce on Wednesday on a higher dollar and heavy
oil losses, losing more than 2 percent as investors preferred
the U.S. currency instead of gold as a safe haven in the face
of economic uncertainties.
In spite of equities market weakness amid recession
worries, bullion failed to rise because of lessened inflation
concerns and as flight-to-quality buying was directed into U.S.
Treasury bonds and the dollar.
Bruce Dunn, vice president of trading at New Jersey-based
Auramet Trading, cited the absence of physical demand and
technical selling for gold's weakness.
"I am not surprised by the sharp price fall. The gold
market has been overextended for a long time with the length of
the long positions and the exchange-traded funds," Dunn said.
Hard metal commodities weakened across the board, hit by
global economic concerns and worries over a potential clampdown
by the U.S. futures regulator on speculation in energy and
commodity trading. []
U.S. August futures <GCQ9> settled down $19.80, or 2.1
percent, at $909.30 an ounce on the COMEX division of the New
York Mercantile Exchange.
Spot gold <XAU=> traded at $908.45 an ounce at 3:06 p.m.
EDT (1906 GMT), against $923.30 an ounce late in New York on
Tuesday. Meanwhile platinum <XPT=> was at $1,094.50 an ounce
from $1,132.
The dollar climbed broadly as growing risk aversion
prompted buying of the precious metal as a safe store of value.
The U.S. currency is currently the metal's chief driver.
[]
Gold buying in India, the world's largest bullion consumer,
was weak as the dollar strengthened against the rupee, making
the metal more expensive for local consumers. []
Meanwhile, gold jewelry sales in Dubai were down 30 percent
in June from a year earlier, as high prices and the economic
downturn hit buying. []
REGULATORY PRESSURE
News the U.S. futures market regulator, the Commodity
Futures Trading Commission, was considering a clampdown on
excessive speculation in commodities by restricting holdings of
big players also hurt prices, dealers said.
On Tuesday, CFTC Chairman Gary Gensler said in a statement
that the agency would hold hearings to see whether federal
speculative limits should be set by the CFTC on all commodities
of finite supply, especially energy commodities such as crude
oil and other energy products. []
"There is a chance that you are seeing disinvestment and
speculative profit-taking across the entire commodities complex
following a surge of investment money into the commodities,"
said Auramet's Dunn, referring to CFTC's plan.
The news prompted speculation that the approval of proposed
U.S. platinum and palladium ETFs could be delayed until the
CFTC had finished its deliberations.
"We do wonder whether the proposed U.S. listing of platinum
and palladium ETFs - under consideration by the SEC at present
- can possibly be approved until the CFTC's investigations are
concluded," UBS strategist John Reade said in a note.
Palladium <XPD=> was at $231.50 against $239. Silver <XAG=>
fell below $13 an ounce for the first time since May 5. It was
last at $12.88 an ounce against $13.10.
(Editing by Christian Wiessner)
