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By Atul Prakash
LONDON, April 18 (Reuters) - Gold prices tumbled on Friday
as the dollar jumped after better than expected earnings results
from Citigroup <C.N> and oil prices fell on worries about demand
from China, analysts said.
Gold <XAU=> fell by more than 3 percent to $906.90 an ounce
and was at $913.90/914.60 at 1314 GMT from $938.90/939.70 in New
York late on Thursday, when it hit a three-week high.
The dollar touched a seven-week high against the yen and
pulled further away from a record low versus the euro after
Citigroup's results surprised investors with results that were
less bleak than many had feared. []
"Precious (metals) are all tracking the dollar," said David
Thurtell, analyst at BNP Paribas. "Investors who have been
seeking the relative safety of commodities have unwound some of
that long position to get back into equities."
A rising dollar makes dollar-denominated currencies more
expensive for holders of other currencies.
Gold, traditionally seen as a safe-haven asset and a hedge
against inflation, often thrives on bad news.
Oil <CLc1> fell more than $2 a barrel after a surge to new
record highs this week, pressured partly by worries about a
possible slowdown in China, the world's second biggest energy
consumer.
Looking ahead, traders said bullion markets are waiting for
a meeting of the U.S. Federal Reserve later this month. Further
aggressive interest rate cuts in the United States could hit the
dollar and boost gold prices.
RISK APPETITE
Huge writedowns from U.S. banks have undermined the health
of the U.S. economy, and sentiment towards the dollar.
But some banks and analysts are now saying the worst of the
turmoil that has plagued financial markets since last August
could be coming to an end.
"The increasing risk appetite of investors could lead to
shifts of assets into stock markets, which might be negative for
gold," analysts at Dresdner Kleinwort said in a report.
"All in all, it should be a quieter day for gold, unless
unforeseen events hit the news wires."
Palladium <XPD=> was down at $444/449 from $458/463 an ounce
and silver <XAG=> slipped to $17.64/17.69 an ounce from
$18.23/18.28 on Thursday.
Platinum <XPT=> fell to $2,020/2,030 from $2,042/2,052, but
analyst expect prices to hold firm.
"The South African power shortages are keeping the platinum
market on edge as a swift resolution to the structural problems
is far from near," Barclays Capital said in a report.
"We forecast prices to average $2,100/oz in Q2 as platinum
supplies are heavily dependent on South Africa and the delicate
power supply situation as well as mine safety concerns leave
mine output extremely susceptible to potential disruptions," the
bank said.
(Additional reporting by Pratima Desai and Alastair Sharp;
editing by Daniel Magnowski)
