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Gold drops on speculation

02 February 2009 14:28 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. Gold dropped on speculation that its rally to a three-month high, prompted by investors who sought an alternative investment amid the global recession, was overdone, Bloomberg reports.
On Jan. 30, bullion reached $929.70 an ounce, the highest since Oct. 10, as holdings in the worldâ€™s biggest exchange-traded fund backed by bullion gained to a record, signaling increased demand for the metal as a haven. Investment in the SPDR Gold Trust reached a record 843.6 metric tons last week.
Gold for immediate delivery fell as much as 1.6 percent to $912.95 an ounce and was at $914 at 1:29 p.m. in Singapore.
The price rose 3.1 percent last week and added 5.2 percent in January, the third straight monthly advance, as U.S. stocks fell for the fourth straight week, capping the marketâ€™s worst January retreat.
Gold for April delivery was down 1.3 percent at $916 in after-hours electronic trading on the Comex division of the New York Mercantile Exchange, while gold for December delivery on the Tokyo Commodity Exchange gained 0.3 percent to 2,641 yen a gram ($920 an ounce) at 2:30 p.m. Tokyo time.
The dollar rose today against the euro, extending last monthâ€™s 8.3 percent gain. The U.S. currency was at $1.2728 as of 1:31 p.m. in Singapore from $1.2813 late in New York on Jan. 30.
The Institute for Supply Managementâ€™s factory index, due today, dropped to 32.5 in January from a revised reading of 32.9 the prior month, according to a Bloomberg News survey of economists. A reading of 50 is the dividing line between growth and contraction. Silver for immediate delivery declined 1.8 percent to $12.44 an ounce at 1:31 p.m. Singapore time after touching $12.68 earlier, the highest since Oct. 1. Among the platinum group metals, platinum lost 1.3 percent to $975 an ounce, and palladium was 1.3 percent higher at $196 an ounce.