US gold slides with other metals as oil turns down

NEW YORK, March 4 (Reuters) - U.S. gold futures along with
other precious metals suddenly reversed course with crude oil
prices on Tuesday, falling sharply after platinum and palladium
set new record and contract highs, traders said.

"We're predominantly trading against crude right now,
especially in gold," said Frank McGhee, head precious metals
trader at Integrated Brokerage Services LLC in Chicago.

"We're literally in intraday swings," he added, "as crude
makes a new run to the highs, gold swings up. As it comes off as
we are now, the gold comes back down."

Gold futures firmed at the open on Tuesday, coming short of
the all-time high set on Monday, and other metals in the complex
either flirted with or surpassed contract highs as funds and
speculators loaded up precious contracts.

As soon as NYMEX crude oil futures turned off their earlier
record level near $104 per barrel, sellers pounced on gold and
precious metals contracts, sending them sharply lower as well.

Gold futures for April delivery GCJ8 on the COMEX division
of the New York Mercantile Exchange dropped $19.90 to $964.50 an
ounce after reaching an earlier high at $990.30 and off the
record high at $992.00 reached Monday morning.

U.S. crude oil futures fell more than $3 a barrel amid weak
equities, expectations of increased energy inventories, and talk
about OPEC's meeting on Wednesday. The drop follows crude's rise
on Monday to a record near $104.

On the New York Mercantile Exchange, April crude CLJ8 was
down $2.35, or 2.29 percent, at $100.10 a barrel. Monday's surge
took prices to a record $103.95.

Another gold broker said many of his customers had been
sidelined as precious contracts advanced to ever-higher levels,
questioning whether they could sustain those heights ahead of
key energy market and employment readings later this week.

"I'd like to see what happens with the events this week,
like the energy (inventory) numbers on Wednesday, OPEC comments
on Thursday and the (U.S.) unemployment rate on Friday, to see
if they change the (precious) market's direction," said one New
York gold broker.

Meanwhile, the precious metals complex may find support with
the dollar continuing to suffer at the euro's hands.

"The contrapoint is the dollar (against the euro) and gold
is caught in between that and the crude," a trader said.

Though the euro steadied at levels just off its record
against the dollar set Monday. But, the European currency had
gained nearly 3.5 percent in the past week on expectations the
Federal Reserve will keep cutting U.S. interest rates to fend
off a possible recession.

Spot gold <XAU=> was quoted at $964.60/965.50, down from
$981.20/982.00 at the close on Monday. London bullion dealers
fixed the afternoon spot price at $984.75 an ounce.

Silver also reversed its earlier rally, tumbling into steep
decline after closing on Monday near its 28-year high.

COMEX's May silver SIK8 lost 31.5 cents, or 1.56 percent,
to $19.8650 an ounce, after surging to a 28-year high of $20.740
on Monday. It fell as low as $19.7550 an ounce.

Spot silver <XAG=> slid to $19.74/19.79 from $20.27/20.32 at
Monday's close. London silver was fixed at $20.32 an ounce.

The active NYMEX platinum contract for April delivery PLJ8
fell $6.60 to $2,235.0 an ounce. On Monday, it set a record high
of $2,245. Spot platinum <XPT=> fetched $2,230/2,240 an ounce,
unscathed by the widespread selling.

NYMEX June palladium PAM8 declined $29.75, or 4.57
percent, to $558.95 an ounce. Spot palladium <XPD=> traded at
$550/555 an ounce.
(Reporting by Carole Vaporean, editing by Matthew Lewis)