Metals Sink on High Dollar, Reports

Other bad news for gold came in the form of a new report from the World Gold Council, which says purchases of gold by investors dropped 26% to 147 tons in the first quarter, compared with the same period a year earlier.

Overall gold demand, which includes jewelry and electronics, was up 4% in the quarter. But the bullion bulls shouldn't get too sanguine, as it is robust investment demand which has historically been the key to higher prices for the metal, as Jeff Christian, managing director at CPM Group, has noted repeatedly.

In the precious-metals patch, Harmony Gold(HMY Quote) and Agnico Eagles Mines(AEM Quote) were following the metal price lower, down 1.8% and 3% respectively.

Shares of Randgold Resources(GOLD Quote) were bucking the sector softness, up 0.5% in recent action.

As for base metals, copper prices slipped 12 cents to close $3.42 a pound, largely prompted by the dollar action. But the move was also affected by a drop in housing permits issued during April, which augers lower construction activity in the future and hence lower copper demand.

Copper is used for electrical wiring in new dwelling construction.

The PowerShares DB Base Metals(DBB Quote) ETF, which tracks other industrial metals as well as copper, was sinking 2.8%.

Shares of Southern Copper(PCU Quote) were sliding 0.4% in recent action.