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Gold ends more than $6 lower as dollar strengthens

By Polya Lesova & Myra P. Saefong, MarketWatch

Last Update: 2:02 PM ET May 7, 2008

SAN FRANCISCO (MarketWatch) — Gold futures closed with a loss of more than $6 an
ounce Wednesday with strength in the U.S. dollar against other major currencies
prompting the precious metal to end a three-session winning streak

Gold for June delivery fell to a low of $865.50 an ounce on the New York
Mercantile Exchange. It closed $6.50 lower at $871.20, after climbing nearly $27
over the previous three trading sessions.

“Gold traded back on the defensive after the dollar reasserted itself in the
European morning,” said analysts at Action Economics.

The dollar rose Wednesday as downbeat U.S. home sales data failed to offset the
effects of weak U.K. and eurozone data earlier. The dollar index, which measures
the greenback against a basket of six major currencies, was at 73.53 in North
American trading, compared with 73.015 late Tuesday. See Currencies.
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The greenback’s rise came despite a drop in the National Association of Realtors’
index of sales contracts on previously owned homes. The index, considered a
leading indicator of existing home sales, fell 1.0% in March, and was 20.1% below
the March 2007 level. See Economic Report.
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Gold’s fall marked a reversal from Tuesday, when the metal gained $3.60 at
$877.70 an ounce, boosted by oil’s surge to a record high above $122 a barrel.

Crude-oil futures touched a fresh record above $123 Wednesday following a U.S.
government report which showed that crude supplies climbed for a third week in a
row, but that refinery capacity declined. See Futures Movers.
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