Metals drop with crude oil prices

Metals prices followed crude oil prices lower Tuesday as the significant decline in oil prices as Hurricane Gustav passed through the Gulf of Mexico and along the US Gulf Coast without causing much damage to oil facilities there.

The drop in oil prices and a strengthening US dollar both worked to reduce the demand for metals as a safe place to put money to protect it from inflation.

Among precious metals, December gold was $25.70 lower to $809.50 per troy ounce while December silver fell 56 cents to $13.15 per troy ounce and October platinum plummeted $86.30 to $1,403.50 per troy ounce.

Copper also saw declines as concerns continued that demand will decline after the Institute of Supply Management reported that its factory index dropped to 49.9 in August, showing a contraction in manufacturing activity in the United States.

Besides its use in home construction, copper is used in the manufacture of appliances and automobiles.

December copper dropped 11 cents to $3.27 per pound in New York, while three-month copper was down $25 to $7,280 per tonne, or $3.30 per pound, on the London Metal Exchange.