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Will Gold Fall after Dollar Gained?

October 27, 2009 at 20:29 by Vladimir Vyun

Gold slid on speculation that the dollar will extend a rally, eroding appeal of the precious metal as an inflation hedge. The greenback advanced for a fourth straight session against a basket of six major currencies. Gold futures often move inversely to the U.S. currency.

Gold doesn’t have much buying interest. Expectations of a drop in a futures signal that a growing proportion of market players consider the current gold price as unsustainable. This concern can put gold under considerable pressure.

December futures for gold delivery slid $4.90 (0.5 percent) to $1,037.90 per ounce by 10:56 on the Comex division of the New York Mercantile Exchange, ending a four-session decline, the longest fall since the period ended August 10th.

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