Gold falls as strong dollar spurs sales

The dollar gained as much as 0.8 percent against the euro Thursday. Gold, which typically moves inversely to the greenback, reached an all-time high of US$1,152.85 an ounce Wednesday. The metal has climbed 29 percent this year as the U.S. currency has dropped 6.1 percent against the euro.

“We're down on the back of the stronger dollar,” Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva, said Thursday by phone.

Gold for immediate delivery slid US$9.85, or 0.9 percent, to US$1,135.65 an ounce by 11:20 a.m. local time. Gold futures for December delivery on the New York Mercantile Exchange's Comex division lost 0.5 percent to US$1,135.50 an ounce.

The metal slipped to US$1,136 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from a record US$1,149 at Wednesday's afternoon fixing. Spot prices, up 19 percent since the end of August, are headed for a third weekly increase.

Among other precious metals for immediate delivery in London, silver slid 1.7 percent to US$18.255 an ounce. Platinum fell 1.2 percent to US$1,424.50 an ounce, while palladium was 0.7 percent lower at US$367.75 an ounce.

Platinum held in ETF Securities Ltd.'s exchange-traded products rose 0.7 percent to a record 422,527 ounces Wednesday, according to the company's Web site. Palladium holdings increased 0.7 percent to a record 595,258 ounce.

The “long-term trend of gold is on the upside,” Bob Takai, general manager of financial services at Japanese trading company Sumitomo Corp., said in a Bloomberg Television interview Thursday.

The rally has pushed spot gold's 14-day relative strength index, a gauge of whether a commodity or security is overbought or oversold, above the level of 70 viewed by some investors and analysts who follow technical charts as signaling a decline. Today's reading for immediate-delivery bullion was 70.95.

Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, rose 3.66 tons to 1,117.49 tons Wednesday, the first gain since Nov. 9. Investments in ETFs backed by gold surged 68 percent this year through September as the financial crisis wracked the global economy and the sliding dollar ignited inflation concern, the council said Wednesday.

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