October 23, 2010 - 10:30AM
Gold futures fell, capping the biggest weekly slide since early July, as the US dollar rebounded, eroding demand for the precious metal as an alternative investment.
The greenback headed for a weekly gain against a basket of six currencies, snapping a five-week slump. Gold has dropped 4.5 per cent since reaching a record $US1,388.10 an ounce on Oct. 14.
``Gold is in the midst of a long-awaited correction,'' said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago. ``From a technical point, there's really nothing between here and $US1,260 for gold to hang its hat on.''
Gold futures for December delivery fell 50 cents to settle at $US1,325.10 an ounce at 2 p.m. on the Comex in New York. This week, the most-active contract dropped 3.4 per cent, the most since July 2. Earlier, the metal touched $US1,315.60, a two-week low.
Yesterday, holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, decreased 0.91 metric ton to 1,298.27 tons, the fifth straight decline.
Before this week, gold reached an all-time high 16 times since Sept. 14 as the US dollar declined. The metal has gained 21 per cent this year.
Fed meeting
Gold may fluctuate until Federal Reserve policy makers meet in two weeks to decide whether to increase stimulus measures to spur US growth.
The Fed has kept its... (click title to see full story)
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