Gold News

Gold price slips from $817 high

Gold prices have fallen away slightly from two week highs posted yesterday, with the dollar looking stronger against a basket of currencies.

Gold for February delivery today (December 13th) fell by $7.30 to sink to $811.50 per ounce on the New York Mercantile Exchange, while spot gold dropped around $3 early on to rest just above $810 per ounce, before falling further still.

Yesterday saw gold stage a late rally, reaching a two-week high of $817 per ounce, as the Federal Reserve and other central banks gestured at new plans for injecting liquidity into financial markets.

Investec Australia said: "While more money slushing around the banking system will alleviate the liquidity issues, it also means more spending power, and with it the potential for inflation and higher gold prices."

But today's drop-off in gold prices reflected the volatility of current markets, with moves from the Fed still failing to clarify to what extent the US economy is suffering with subprime-related bad debt – and many investors hesitant as a result.

In addition to this week's disappointingly small rate cut, the Fed on Wednesday announced that a temporary short-term lending facility would be available, as a further means of increasing credit access.

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