Gold prices crash

NEW YORK, APRIL 15: Gold prices closed slightly higher on Friday as investors were jolted by inflation news and plummeting stock markets, ...

NEW YORK, APRIL 15: Gold prices closed slightly higher on Friday as investors were jolted by inflation news and plummeting stock markets, but most traders said the precious metal8217;s once-shining appeal as a safe haven appeared dead.

As Wall Street stocks ended the week with yet another heavy sell off, many commodity markets also closed weak as investors fled speculative positions to preserve capital. Oil, copper, coffee and grains were other declining commodities.

Overall, the Goldman Sachs Commodity Index closed 2.23 points or 1.12 percent lower at 197.37 points.

At the COMEX, gold for June delivery closed 1.40 an ounce higher at 284.60 after climbing to 288.50 early in the day.

quot;The safe-haven issue has been thoroughly disproved this morning,quot; said Leonard Kaplan, Chief dealer at LFG Bullion Services in Chicago. quot;While there still remain a few who seek it as a safe haven, those numbers are dying quickly and today is the perfect example.quot;

Until recent years, investors sought bullion in times of turmoil to protect portfolios and currencies against erosion by inflation.

But on Friday, gold could not hold its knee-jerk rally after the US Labour Department reported a higher-than-expected 0.7 per cent rise in March consumer prices, the biggest jump in a year. The inflation data suggested more U.S. Interest rates hikes ahead.

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quot;Had you asked even the most ardent gold bug what conditions would create a bull market, the two most common they would say would be a collapse in the stock market and a rise in inflation rates,quot; Kaplan said. quot;Today we have a confluence of both of those factors. The bottom line is gold is an industrial metal 8212; period.quot;

Copper was a traditional industrial commodity that felt the backwash of selling from worried investors. COMEX May copper closed 1.65 cents lower at 75.35 cents a pound.

quot;You have a combination of technical vulnerability, poor liquidity right now in the base metals including copper, stock market plunges and interest rate fears,quot; said William O8217;Neill, head of futures research at Merrill Lynch.

quot;They all serve to extend the recent weakness in copper and the base metals in general,quot; he said.

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At the New York Mercantile Exchange, oil markets closed weak as speculators cashed out. Crude oil prices are down by more than 25 percent from the nine-year high above 34 set a month ago before the members of the Organisation of Petroleum Exporting Countries agreed to boost world supplies.

On Friday, crude oil for June delivery closed 29 cents lower at 24.33 a barrel. June gasoline fell 1.03 cents a gallon to 77.29 cents and June heating oil closed 1.31 cents a gallon lower at 62.93 cents.

Grain prices also closed lower, with traders spurred by the crumbling Financial markets to take profits and ignore the latest long-range forecasts for drought threats in the Midwest this summer.