Gold News & Info

Source: Marketwatch

New York— Gold futures edged lower Wednesday after two sessions of gains, retreating after hitting another record high as investors worried the recent rally might be overdone. Gold has gained nearly 5% this month, rising in seven out of the past nine sessions. It is up 20% this year. Wednesday's decline came even as the U.S. dollar continued to weaken, falling to a new 14 month low following upbeat Chinese data and strong U.S. corporate earnings. Gold for October delivery slid 30 cents to $1,063.90 an ounce on the Comex division of the New York Mercantile Exchange, after rising to $1,070.20 earlier in the session, the highest record for a front-month contract. "Given the scale and pace of recent gains and with gold flirting with overbought territory on the charts, the metal is in much need of consolidation and correction to avoid a more substantial price drop," said James Moore, an analyst at TheBullionDesk.com, in a note.

Some analysts, meanwhile, said that as long as the dollar keeps declining, gold prices will keep rising. "Gold has historically had the strongest inverse relationship with the U.S. dollar and this is likely to continue," said analysts at Morgan Stanley in a note Wednesday. In the long term, gold may also see rising demand from China, the analysts said. "In advance of the Chinese yuan being freely traded, we believe China may want to build gold reserves," they said. "Our Chinese clients are telling us it is their heritage to own gold," said Ben Johnson, owner of First Securities Northwest in Portland. See full story.