Business | Markets
Gold slides from one-month high as investors take profits
Gold fell in volatile trade yesterday, as investors booked profits after pushing up the price to its highest level in more than a month above $930, but more gains may be on the cards with oil hitting another record peak.
- Reuters
- Published: 00:19 May 23, 2008
London: Gold fell in volatile trade yesterday, as investors booked profits after pushing up the price to its highest level in more than a month above $930, but more gains may be on the cards with oil hitting another record peak.
Spot gold dropped to $922.50/$923.50 an ounce from $928.55/$929.75 an ounce late in New York on Wednesday, having earlier jumped to $935.30 an ounce - its highest level since April 18.
Oil roared to an all-time high above $135 an ounce on supply worries and the weakening US dollar, triggering fears of inflation and raising gold's safe-haven appeal.
"I think the confidence is back in the market. We broke $900, we broke $930," said Frederic Panizzutti, metals analyst at MKS Finance.
"So definitely we see some potential for higher levels again. The psychological (resistance) is $950, then probably $980 and there is of course the psychological $1,000 level."
Despite the gains, gold was still more than $100 away from the record high of $1,030.80 an ounce hit on March 17.
Some analysts remained cautious.
"There are enough supply constraints and there is no dearth of bullish views on crude oil from various institutions and organisations. This one-way outlook adds fuel to the fire, propelling gold along with it," said Pradeep Unni, analyst at Vision Commodities in Dubai.
"Possibly, we could see $138-$141 in crude in near term, but extreme caution should be exercised as the rally seems to have over-extended itself and sharp reversals could be on board, meaning it could also succumb in the process."
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange lost $6.2 an ounce to $922.4 an ounce, having risen to $933 an ounce on Wednesday - its highest level since April 22.
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