Gold Dropped Amid Tumbled Oil Prices

Gold slipped from a two-week peak hit earlier on Thursday as investors sold after oil prices tumbled on U.S. government data showing a large increase in crude oil supplies last week, traders said.

Spot gold touched $636.40 an ounce, the highest since January 3, but by 1622 GMT was quoted at $633.70/634.45 against $631.50/632.50 late in New York on Wednesday, when it gained about one percent.

U.S. stocks of crude oil rose 6.8 million barrels to 321.5 million barrels in the week ended January 12. The news sent crude oil prices down more than $2 to $50.05, the lowest since May 2005.

"Some speculative buying has enabled the upside move to accelerate," said Frederic Panizzutti, metals analyst at MKS Finance.