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01-25-2011, 02:00 PM #1
Gold Slips to 3-Month Low
JANUARY 25, 2011, 12:55 P.M. ET.
Gold Slips to 3-Month Low
By MATT WHITTAKER
NEW YORK—Gold futures fell to a three-month low as the dollar rose and the metal's status as a refuge continued to dim.
The most actively traded contract, for February delivery, was recently down $18.80, or 1,4%, at $1,325.70 a troy ounce on the Comex division of the New York Mercantile Exchange. Its intraday low of $1,321.90 was the lowest price since Oct. 27.
"A lot of it is panic selling," said Bob Haberkorn, senior market strategist with Lind-Waldock in Chicago.
Gold has lost 6.7% this year as investors have gained confidence in the economy, feeling less of a need for gold as a hedge against financial turmoil and European sovereign-debt issues. Those fears had sent the metal to an intraday peak of $1,432.50 in December.
Now, the declining prices are sending shorter-term investors scurrying.
"No one knows where the bottom is going to be," Mr. Haberkorn said. "Traders are waiting to see how it reacts to that $1,320 level."
With gold already on the defensive, a strengthening U.S. dollar sparked further selling Tuesday by making dollar-denominated gold more expensive for foreign buyers, damping demand.
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Zuma Press
Gold prices have fallen as investors' confidence in the economy grows.
.The ICE Futures U.S. Dollar Index was recently up 0.4% after news that U.S. home prices fell in November from a month earlier, extending a downward trend that began in August.
That left market participants continuing to search for what they see as a fair price for gold.
"Prices were too high," said Ira Epstein, director of the Ira Epstein division of the Linn Group. "The market is searching for that zone where prices come back."
Write to Matt Whittaker at Matt.Whittaker@wsj.com
http://online.wsj.com/article/SB1000142 ... 74800.htmlNO AMNESTY
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