GOLD backed down today in New York from a record struck in Europe, accelerating losses as the US dollar bounced and extended gains.
Despite the losses, the metal may have even more downside due to the largely speculative — rather than physically driven — price increases in recent days.
Most-actively traded gold for December delivery fell $US8 to settle at $US1106.60 an ounce on the New York Mercantile Exchange.
Thinly traded nearby November gold also lost $US8 to settle at $US1106.00. In European trade, the December contract hit $US1123.40, November reached $US1121.30 and spot metal hit $US1122.87.
KEY COMMODITY PRICES: oil, base metals, livestock and wheat
Gold extended losses as “pile-on” selling weighed on the metal, said Michael Gross, broker and futures analyst with OptionSellers.com.
“We think the market is overextended here, and we are due for a bit of a correction,” Mr Gross said. Still, he added, “we don’t see the long-term trend changing dramatically.”
In recent trading, the ICE Futures US Dollar Index was up 0.426 point at 75.588 points.
“The key now is likely to be if the (index) can hold the 75 level on the charts, potentially sparking a correction on gold and equities,” said James Moore, analyst with TheBullionDesk.com.
“Or if it fails and extends lower, we could easily see gold push on to new highs above the $US1150 level.”
If the index gets above 75.80, gold may be headed back to the $US1100 level, said Patrick Donnelly, senior market strategist with Olympus Futures.
