24 Sep 2008

Gold drops in price

8:21 am on 24 September 2008

Gold dropped in price on Tuesday as lower oil prices and a firmer dollar prompted investors to cash in previous gains.

But analysts say gold could be poised to trend higher due to concerns over the impact of a proposed $US700 bailout of the financial system by the US government.

Spot gold was $US889.75/892.75 an ounce at 3:05pm EDT (1905 GMT) on Tuesday, down 1.2% from gold's nominal Monday close of $US900.20.

US gold futures for December delivery settled down $US17.80, or 2%, at $US891.20 an ounce on the COMEX division of the New York Mercantile Exchange.

UBS lifted its short-term forecasts for gold on Tuesday, citing safe-haven buying and a weaker outlook for the dollar.

Silver tracked gold lower, slipping 2.5% to a session low of $US13.07 an ounce. Spot silver was last quoted at $US13.24/13.32 an ounce, down 1.2% against $US13.40 on Monday.