Renewed dollar pushes gold, base metals down

A sudden jump in the dollar's value saw base and precious metal prices fall sharply in London on Tuesday as investors bought the greenback and sold metals. Gold fell 3.3% to US$436.90/oz on the London Bullion Market to drop to its lowest price since November 12. The prospect of next week's US Federal Reserve meeting also prompted many traders to buy the dollar as there is strong speculation that US interest rates will be raised further, which should spell further gains for the dollar. "The cure for dollar weakness is higher rates," the president of the National Futures Advisory Services John Person told CBS Marketwatch. The renewed dollar also had a negative impact on copper's price. The red metal's spot price fell 4.6% to US$1.357/lb on the London Metal Exchange (LME), its lowest level since November 3. Three-month copper fell 4.7% to US$1.310/lb, which was also it lowest point since November 3. ABN Amro's base metals analyst Nick Moore told Dow Jones Newswires that funds have departed copper and are unlikely to return before the end of the year. Spot zinc dropped 3.2% to US$0.512/lb, while three-month zinc fell 3.2% to US$0.518/lb. Spot aluminum fell 1.4% to US$0.820/lb and three-month aluminum was off 1.2% to US$0.821/lb.