By Pham-Duy Nguyen
Nov. 13 (Bloomberg) -- Gold and silver futures fell for the third straight day on concern that a slumping global economy will damp demand for commodities. Platinum also declined.
More than $30 trillion has been erased from the value of global equities this year as credit losses and writedowns reached $954.5 billion. Gold has dropped 32 percent from a record in March as an index measuring prices of raw materials tumbled to the lowest since October 2003.
``The gold market is telling us that deflation has ravaged the base metals, the soft commodities, the grains,'' said Dennis Gartman, an economist and the editor of the Suffolk, Virginia- based Gartman Letter. ``The gold market is telling us that depression is possible and even likely, and that deflation is the order for the day.''
Gold futures for December delivery fell $13.30, or 1.9 percent, to $705 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, the price touched $698.20, the lowest for a most-active contract since Oct. 24.
Silver futures for December delivery dropped 68 cents, or 7.2 percent, to $8.80 an ounce.
Platinum futures for January delivery fell $12.10, or 1.5 percent, to $813 an ounce on the Nymex, also dropping for the third straight day. The metal has lost 47 percent this year. Palladium for December delivery fell $2.05, or 0.9 percent, to $213.95 an ounce.
The Reuters/Jefferies CRB Index of 19 raw materials rebounded today after earlier touching 244, the lowest in five years. While gold is down 16 percent this year, it is still the fifth-best performer on the index. Only hogs and sugar have gained in 2008.
German Recession
The German economy, Europe's largest, slid into its worst recession in at least 12 years in the third quarter as the global financial crisis curbed exports and spending, government data showed today. Last week, the International Monetary Fund warned of the first simultaneous recession in the U.S., Japan and Europe in more than 60 years.
``In this economic and financial environment, it is wise to stay away from most risky assets for the next 12 months,'' said Jon Nadler, a senior analyst at Kitco Inc. in Montreal. ``Gold will also fall as deflation sets in.''
Still, steep declines in commodity prices may represent a buying opportunity, some analysts said.
Gold may climb above $1,000 in 2011 as mine output drops, production costs rise and demand climbs, Morgan Stanley said.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
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