COMMODITIES : Gold Dips Below $400 on Inflation News

Prices of gold futures fell for the sixth straight session Wednesday on the Commodity Exchange in New York and settled below $400 an ounce for the first time in more than 19 months because of slack investor demand.

With the latest economic statistics still indicating only modest inflation, gold futures could fall as low as $385 before finding many buyers, analysts said.

On other markets Wednesday, other precious metals futures also declined; copper futures were lower; livestock and meat futures were higher; energy futures were mixed; grains and soybeans were mixed, and stock index futures advanced.

Gold for delivery in October settled at $399.20, $7 below Tuesday’s final price. Gold futures last closed below $400 on Feb. 18, 1987.

“The market did break that psychological barrier today, and the next stop is in the $385-$388 area,” said Peter Cardillo, an analyst in New York with Josephthal & Co.

The gold market, pressured for the past four months by a stronger dollar and only slight inflation, sold off in reaction to the government’s report that consumer prices rose just 0.4% in August, analysts said.

The Labor Department said the rise in the consumer price index was equal to an annual inflation rate of 5.2%, the same as in July. The Commerce Department said Americans’ personal income rose 0.2% in August--compared to 0.7% in July--also was bearish for gold prices, analysts said.

“The latest batch of economic statistics are generally non-inflationary,” said James Steel, metals market analyst with Refco Inc. “There appears, really, to be no worry of inflation; therefore, the precious metals are coming off.”

Steel said the extremely bearish tone of the metals markets was evident in the narrowing gap between gold and platinum prices. Platinum almost always trades at least $100 above gold. But Wednesday, platinum for October delivery on the New York Mercantile Exchange settled at $485.10 an ounce, $9.80 below Tuesday’s final price and just $85.90 above the October gold price.

Cattle Futures Lower

Silver settled 7.5 cents to 8 cents lower on the Commodity Exchange, with September at $6.177 an ounce.

Copper futures declined markedly on the Commodity Exchange amid profit taking, but the fundamentals of tight supplies and steady demand remained strongly bullish, Steel said.

Copper settled 0.95 cent to 2.60 cents lower, with the spot September contract at $1.123 a pound and the more active December contract at $1.01 a pound.

Most cattle futures moved lower on the Chicago Mercantile Exchange, pressured by continued weakness in the cash markets due to slack demand, analysts said.

Live cattle were 0.45 cent lower to 0.17 cent higher, with October at 69.10 cents a pound; feeder cattle were 0.33 cent to 0.75 cent lower, with September at 79.75 cents a pound; hogs were 0.32 cent lower to 0.28 cent higher, with October at 38.77 cents a pound; frozen pork bellies were 0.05 cent to 0.55 cent lower, with February at 50.65 cents a pound.

Energy futures finished mixed on the New York Mercantile Exchange, with higher prices for gasoline and near-month deliveries of crude reflecting concerns about falling inventories and the outcome of an OPEC pricing committee meeting next week, analysts said.

West Texas Intermediate crude oil settled 3 cents lower to 19 cents higher, with November at $14.56 a barrel; heating oil was 0.23 cent lower to 0.18 cent higher, with October at 41.09 cents a gallon; unleaded gasoline was 0.30 cent to 1.01 cents higher, with October at 45.35 cents a gallon.

Soybean and wheat futures prices finished higher on the Chicago Board of Trade; corn was mixed.

Wheat settled unchanged to 0.50 cent higher, with September at $4.05 a bushel; corn was 1.75 cents lower to 2.75 cents higher, with September at $2.765 a bushel; oats were 3.5 cents lower to 1 cent higher, with September at $2.49 a bushel; soybeans were 1 cent to 7 cents higher, with November at $8.375 a bushel.

Stock index futures advanced on the Chicago Mercantile Exchange, where the contract for December delivery of the Standard & Poor’s 500 index settled 0.65 points higher at 273.30.