Gold prices hit their lowest levels in more than a year on Thursday, briefly trading below $700 an ounce, as funds sold heavily to raise cash, but a reversal of the dollar's strength lifted bullion off its session lows. Platinum and palladium also dropped on worries over demand from automakers, who use the metals to make catalytic converters, as the stock markets remained extremely volatile. Spot gold was at $713.65 an ounce at 2:40 P.M. EDT (1840 GMT), down 1.9 percent from Wednesday's close. Earlier it touched a low of $697.45, its weakest since September 2007. “I still think it's all about raising cash and capital preservation. The market is way too long,” said Bruce Dunn, vice president of trading at New Jersey-based Auramet Trading. “All the mining companies are saying gold is going back to $1,000, but I think these people are living in la-la land. You've got a serious recession and people are not buying gold jewelry,” Dunn said. Jewelry buying represents more than 60 percent of annual global gold demand, according to research firm GFMS. US gold futures for December delivery settled down $20.50, or 2.8 percent, at $714.70 an ounce on the Comex division of the New York Mercantile Exchange. The dollar climbed to a fresh two-year high versus the euro and a basket of currencies in choppy trade as investors wary of a severe global recession kept their faith in reserve currencies. Bullion remains under pressure from falling demand in India, the world's biggest consumer of physical gold. “Industry analysts have repoGold prices have gyrated in recent months as financial markets have slumped. The World Gold Council said price volatility spiked in the third quarter, rising to 39 percent from 23 percent the quarter before. Platinum slid more than 7 percent to its session lows, extending losses that have seen prices fall by half since early August, as the firm dollar added to pressure on prices. The white metal has already been hit by falling demand from carmakers, who account for half of platinum use. Spot platinum was at $787.00, down 5.4 percent from Wednesday's late quote. Earlier it touched a low of $770, its weakest since July 2004. Its sister metal palladium dropped 3.2 percent to $168.00.
