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Gold price fall as investors believe rally peak overdone

04 February 2009 10:29 (UTC +04:00)

Bakuâ€“ APA-Economics. Gold declined for a third day as some investors sold the metal on speculation that a rally to a six-month high was overdone. Silver also fell, Bloomberg reports.
Bullion dropped 3 percent in the past two days after ending at $927.85 an ounce on Jan. 30, the highest closing price since July 28. The metal advanced in January for the third straight month, as investors sought an alternative investment amid the global recession.
Gold for immediate delivery declined as much as 0.4 percent to $896.79 an ounce and was at $898.34 at 2:12 p.m. Singapore time. Silver for immediate delivery dropped 0.4 percent to $12.39 an ounce.
April-delivery gold added 0.8 percent to $899.50 in after- hours trading on the Comex division of the New York Mercantile Exchange, after dropping 3.9 percent in the past two days. Speculative net-long positions last week reached the highest since August.
Gold for December delivery on the Tokyo Commodity Exchange was little changed at 2,593 yen a gram ($900 an ounce) at 2:14 p.m. in Singapore.
Speculative net long positions currently account for about 25 percent in the silver market and about 40 percent in the platinum and palladium markets, the Credit Suisse analysts said.