Gold for immediate delivery dropped as much as 0.2 percent to $1,316.35 an ounce after advancing to a record $1,320.70 on Oct. 1. Bullion rose 1.8 percent last week, the third straight weekly advance. Cash silver was little changed after earlier rising as much as 0.5 percent to $22.21, the highest price since September 1980.
“We may see some correction today after another record last Friday, but that will be short-lived and bullion is more likely to head upwards,” said Park Jong Beom, a trader at Tong Yang Futures Trading Co. in Seoul. “There’s still talk of further quantitative easing in the U.S, which will probably continue weighing on the dollar.”
The Dollar Index, which gauges the greenback’s strength against a basket of six major currencies, was little changed today after falling to the lowest level since January on Oct. 1 on speculation that the Federal Reserve will ease monetary policy further to stimulate the U.S. economy. Gold typically moves inversely to the dollar. The index dropped 1.7 percent last week, the third consecutive weekly loss.
Federal Reserve Bank of New York President William Dudley said on Oct. 1 that the outlook for U.S. job growth and inflation is “unacceptable” and that the Fed will probably need to take action to spur the recovery and avert deflation.
Gold has gained 20 percent this year, heading for the 10th straight annual gain, the longest rally since at least 1920. Futures for December delivery were little changed at $1,319.20 an ounce on the Comex in New York, after climbing to an all-time high of $1,322 an ounce on Oct. 1.