BLBG: Gold Falls After Rallying to More Than $900; Silver Declines
Gold fell for a second straight day after some investors sold the metal when it surpassed $900 an ounce. Silver also declined.
The seven-day relative strength index for gold was more than 70 in the previous three sessions, a signal prices may head lower in the short term. The most-active contract closed above $900 for two straight sessions for the first time since August.
“Gold is consolidating its gains right now,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “There is just a little profit taking off the recent highs.”
Gold futures for April delivery fell $11.40, or 1.3 percent, to $890 an ounce on the New York Mercantile Exchange’s Comex division. The contract closed at $901.40 yesterday and $910.70 on Jan. 26.
Silver futures for March delivery fell 21.2 cents, or 1.7 percent, to $11.963 an ounce. The metal slumped 24 percent in 2008 while gold gained 5.5 percent.
“There’s not a lot of buying interest at $900,” said Tom Hartmann, a commodity analyst at Altavest Worldwide Trading Inc. in Mission Viejo, California. “Traders are waiting for a drop back down to $880 to buy again.”
Gold traded as low as $801.50 on Jan. 15.
A rally in equities also pushed gold lower, analysts said. The Standard & Poor’s 500 Index rose as much as 3.4 percent, following gains in Asian and European stock markets.
“Some traders will come out of gold and into the equity market because of the big rally there,” said Marty McNeill, a trader at R.F. Lafferty Inc. in New York.
