Gold price slumps under 800 dollars

LONDON, August 15, 2008 (AFP) – Gold prices tumbled underneath 800 dollars per ounce on Friday, hitting a ten-month low point as the precious metal was hampered by the strong US currency and weak oil prices, analysts said.

On the London Bullion Market, the price of gold slid to 772.98 dollars per ounce. That was the lowest point since the end of October.

Gold, which is used in jewellery, dentistry and electronics, has shed one quarter of its value since striking a record high of 1,032.70 dollars in March.

In the foreign exchange market on Friday, the European single currency sank to 1.4698 dollars — the lowest point since February 20.

A spike in US consumer price inflation (CPI) on Thursday sparked talk of Federal Reserve interest rate hikes, which could make the dollar more attractive to investors and therefore boosted the greenback, dealers said.

“Sentiment has turned more bearish across the metals spectrum (on Friday) after yesterday’s CPI reading triggered speculation the Fed may raise interest rates in order to cap inflation,” said BullionDesk analyst James Moore.

“Gold has broken below 800 dollars per ounce, platinum has traded to its lowest since December, silver has slumped almost 15