Last update: 11:03 a.m. EDT March 18, 2009
NEW YORK (MarketWatch) -- Gold futures fell sharply Wednesday, heading lower for a third straight session to below $900 an ounce on reduced safe-haven demand, as investors continued to move funds away from the metal.
Gold for April delivery fell $21.30, or 2.3%, to $895.50 an ounce in morning trade on the Comex division of the New York Mercantile Exchange. It has lost about $35, or 3.7%, this week, and is now about $110 lower than its recent high above $1,000, hit on Feb. 20.
Gold's weakness came from "diminished [safe-haven] needs as asset allocation spreads in the markets to other areas," said George Gero, a precious metals trader for RBC Capital Markets' global futures division.
Wednesday's losses came despite data showing U.S. consumer prices moved up for a second straight month. Some investors buy gold to hedge against inflation.
With energy prices rising at their fastest rate in seven months, the CPI increased a seasonally adjusted 0.4% in February, the Labor Department reported Wednesday.
Energy prices increased 3.3% in February, the government said, including an 8.3% gain in gasoline prices. Food prices fell 0.1%, the first decline in nearly three years. Investors were also awaiting the Federal Reserve's statement later Wednesday at the end of its two-day meeting.
In equity markets, Asian markets ended mostly higher Wednesday, as most financial stocks staged another rally, but Europe stocks flattened out after an early rise. In the U.S., the Dow Jones Industrial Average was off 86 points at 7,310.
In other metals trading, silver for May delivery fell 2.4% to $12.365 an ounce, while April platinum lost 0.7% $1,044 an ounce. The June contract for palladium lost 1.8% to $194.35 an ounce. Meanwhile, May copper sank 1.2% to $1.702 a pound.
Moming Zhou is a MarketWatch reporter based in New York.