Gold retreats, closes under $474

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    Gold retreats, closes under $474

    By Myra P. Saefong, MarketWatch

    Last Update: 4:31 PM ET Oct. 13, 2005

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    SAN FRANCISCO (MarketWatch) -- Gold futures prices fell Thursday for a second session, losing nearly $3 to close under $474 an ounce as strength in the U.S. dollar dulled interest in the precious metal.

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    "The decline in [U.S.] weekly jobless claims, combined with the higher price component in import prices, confirmed the Fed will remain vigilant on raising rates throughout 2005," said John Person, president of National Futures Advisory Service. See Economic Reports.

    "This factor of higher interest rates here in the U.S. has propped the dollar higher and is weighing on gold's price advance," he said. See Currencies.

    Gold for December delivery closed at $473.80 an ounce on the New York Mercantile Exchange, its lowest since Oct. 5. For the session, it finished down $2.80, or 0.6%. Prices lost over $3 Wednesday, but they're still up over $20 from the month-ago close.

    The dollar found the latest economic data supportive, "at least temporarily," said Dale Doelling, chief market technician at Trends In Commodities.

    From here, Doelling said he continues "to favor the long side of the metal's trade," adding that "the markets remain well bid and all attempts to move the metals lower are quashed by continued heavy buying as the markets approach these significant support levels."

    Insecurity is key

    All in all, however, gold isn't really a dollar-correlation story any longer but is "more a matter of general insecurity," said Frederic Panizzutti, an analyst at MKS Finance in Geneva.

    "The world is certainly more worried in 2005 then it was before 2001, and this [is] for various reasons," he said, citing the risk of terrorist threats, high oil prices, and the economic impact from hurricanes.

    "In the past, the U.S. dollar would have been considered as an appropriate safe heaven, but most of the actual concerns mentioned here could have a negative or, say, less positive impact on the U.S. economy and [dollar]," he said.

    "But gold in physical and non-physical form remains the ideal safe-haven asset and safe haven against any sort of disruption and unexpected happening," he said.

    Meanwhile, other metals futures in New York weakened along with gold Thursday.

    December silver closed at $7.735 an ounce, down 10.3 cents, while December copper fell 2.85 cents to finish at $1.765 a pound. December palladium fell $3.45, or 1.6%, to close at $211.95 an ounce, with sister metal October platinum shedding $11.10, or 1.2%, to close at $934.40 an ounce.

    Tracking inventories, copper supplies were down 234 short tons at 4,452 short tons as of late Wednesday, according to Nymex. Silver stocks were unchanged at 117.4 million troy ounces, while gold inventories stood at 6.25 million troy ounces, flat from the previous session.

    Indexes near one-month lows

    In equity trading, shares of metals-mining companies closed broadly lower. Key indexes that track the sector touched their lowest levels since mid-September, but recovered enough to close at one-week lows. See related story on foreign mining stocks.

    The CBOE Gold Index ($GOX:

    CBOE Gold Index

    News, chart, profile

    Last: 97.76-1.35-1.4%

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    FinancialsMore $GOXnews, chart, profile) 97.76-1.35-1.4%closed at 97.76 points, and the Philadelphia Gold/Silver Index ($XAU: phlx gold silver index capital-weight

    News, chart, profile

    Last: 107.91-1.51-1.4%

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    FinancialsMore $XAUnews, chart, profile) 107.91-1.51-1.4%finished the session at 107.91, with each index down 1.4%.

    The Amex Gold Bugs Index (HUI:

    amex gold bugs index equal-$ weight

    News, chart, profile

    Last: 230.59-4.32-1.8%

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    FinancialsMore HUInews, chart, profile) 230.59-4.32-1.8%lost 1.8% to close at the 230.59 level.

    Among individual standouts, shares of Goldcorp (GG:

    goldcorp inc new com

    News, chart, profile

    Last: 18.96-0.63-3.2%

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    FinancialsMore GGnews, chart, profile) 18.96-0.63-3.2%fell 3.2%. Newmont Mining (NEM: Newmont Mining Corporation

    News, chart, profile

    Last: 45.69-0.48-1.0%

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    FinancialsMore NEMnews, chart, profile) 45.69-0.48-1.0%shares fell 1%. Analysts at UBS downgraded Newmont's stock to "neutral" from "buy" Thursday, citing "price appreciation."

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