Precious Metals

Precious Metals

Tuesday, 2 February 2010

Gold Falls After Biggest Rally in Three Months, Dollar Rebounds

Gold weakened as some investors opted to sell the metal after the biggest advance in three months and the dollar resumed its rise against major currencies.

Gold for immediate delivery fell 0.2 percent to $1,103.35 an ounce at 2:39 p.m. Singapore time, paring yesterday’s 2.3 percent gain, the biggest advance since Nov. 3. The greenback rose 0.2 percent against a basket of six currencies, approaching the highest level since July 2009, after Australia’s central bank unexpectedly kept its benchmark interest rate unchanged.

“The rally is luring some buyers to lock in gains,” said Yu Kyung Kyu, a trader with Eugene Investment & Futures Co. in Seoul. Still, “some are betting on a further rally given that gold’s passed the key $1,085 support level.”

Bullion, which typically moves inversely to the dollar, declined for a second month in January as the dollar rallied 2 percent against the six-currency basket. The metal reached a record $1,226.56 on Dec. 3.
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