Gold fell in Asia, ending a seven-day rally, as the metal’s 13.4% gain in the period and the approaching year-end prompted some investors to sell out.
Gold rose to the highest in more than two months yesterday after the US Federal Reserve cut its benchmark lending rate to a ''target range'' of zero to 0.25% from 1%, driving the dollar lower and boosting the appeal of bullion as an alternative investment. Gold has advanced 1.7% so far this year, extending a seven-year rally.
''Some profit-taking kicked in this morning,'' Wallace Ng, precious metals trader at Fortis Bank, said by phone from Hong Kong today. ''Gold has had a handsome rally and it’s approaching the year-end.''
Bullion for immediate delivery fell as much as 1.2% to $US847.48 an ounce and traded at $US848 in Hong Kong. It reached $US859.95 yesterday, the most since Oct. 13. Silver for immediate delivery was down 0.4% at $US11.19 an ounce and platinum fell 0.8% to $US856.50 an ounce.
Most investors have refrained from taking new positions in gold this close to the year-end and there is little new cash inflow, Ng said.
''Platinum doesn’t seem to benefit from a weakening dollar and its performance still depends on the auto industry,'' he added.
The dollar last traded at $US1.4066 against the euro. It reached $US1.4147 yesterday, the weakest level since Oct. 1, after Federal Reserve policy makers said the bank will employ ''all available tools'' to promote the resumption of sustainable economic growth and preserve price stability.
February-delivery gold advanced 0.7% to $US848.90 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.
Gold for October delivery in Tokyo gained 0.5% to 2,431 yen a gram ($US850 an ounce) at the 11 a.m. local time break.
