Gold futures trade lower; copper futures down 4%By Polya Lesova,...

Gold futures trade lower; copper futures down 4%

By Polya Lesova, MarketWatch
Last update: 9:12 a.m. EST Dec. 18, 2008Comments: 10NEW YORK (MarketWatch) -- Gold futures came under selling pressure Thursday, pausing after the previous session's big rally, as the U.S. dollar traded mixed against other major currencies.
Meanwhile, copper futures succumbed in early action.
Gold for February delivery fell $3.30 to stand at $865.20 an ounce on the New York Mercantile Exchange. Earlier, the gold contract soared as high as $879.60 an ounce.
"Gold's safe-haven credentials have been reaffirmed in recent days, as the dollar's safe-haven appeal is increasingly being questioned," said Mark O'Byrne, executive director of Gold & Silver Investments Ltd.
On Wednesday, gold futures rose $25.80 to end at $868.50 an ounce in Nymex dealings.
In foreign-exchange trading, sentiment toward the dollar remained fragile in the wake of the greenback's pounding by the euro and other currencies after the Federal Reserve announced historic efforts this week to revive the U.S. economy. See Currencies.
And in energy, crude-oil futures traded below $40 a barrel, after having tumbled 8% on Wednesday, as investors resumed their worries about a slowdown in demand, shrugging off the Organization of Petroleum Exporting Countries' move to slash output in a bid to prop up prices. See Futures Movers.
"Currency markets are understandably unnerved by the Fed's aggressive loose-money stance, as it seeks to drive interest rates practically to zero, thus prompting investors to seek alternative returns even in other currencies," said Edward Meir, an analyst at MF Global.
"Despite the recent steep decline in the greenback, it is interesting to note that both [industrial] metals and energy are not responding in the traditional fashion, telling us that demand concerns are overriding the impact of any currency-induced bounce," Meir wrote in a research note.
Also on Nymex, copper for March delivery fell 5 cents, or 4%, to $1.32 a pound. Copper prices have tumbled 57% over the last three months.
March silver also fell, dropping 27 cents to $11.15 an ounce. January platinum gained $8 to $873.20 an ounce, while March palladium fell 10 cents