Gold falls after rallying yen sparks selling in Tokyo |

Gold falls after rallying yen sparks selling in Tokyo

NEW YORK – Gold prices fell to a weekly low Wednesday, after strong selling overnight by Japanese investors spilled over into the New York futures market.The benchmark February contract settled $14.60 lower at $509.50 an ounce after trading in a $508.50 to $517.20 range throughout the day on the New York Mercantile Exchange. Spot gold fell $14.50 to settle at $506.50.Traders said gold pulled down the rest of the precious metals, including March silver, which dipped to a two-week low of $8.420 an ounce.Gold had recently been trading at 25-year highs, and silver had been trading at 18-year highs.Amid a large long position held by investors on the Tokyo Commodity Exchange, heavy selling moved into gold overnight as the yen rallied against the dollar and the euro.The strength of the yen against the dollar was seen as the impetus for the gold selloff as the yen moved to a fresh seven-week high versus the dollar, marking the dollar’s biggest daily drop versus the yen in about five years.Gold is denominated in U.S. dollars.Frank Lesh, a futures analyst with Rand Financial services, said speculators decided to take profits Wednesday in New York as the year end approaches.”Gold reached close to the upside objective near the $550 level and a correction was needed to keep the market healthy,” Lesh said. “The correction does not change the overall bullish tone of the market.”Larry Young, a senior trader at Infinity Brokerage, echoed Lesh’s sentiment and said that the last two weeks of the year usually are marked by caution.”If you are a fund manager you want to show a profit for the month of December … so we are seeing funds taking money off the table ahead of the holidays,” Young said.Young added that if gold were to break down to the $470 level it would still be in “good shape.””Gold would still be strong even at $465-$460,” he added.March silver settled down 12.0 cents at $8.465 an ounce.Vail, Colorado

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