Gold Slid From 18-years Peak

Gold fell to $498 an ounce in Asia on Wednesday as investors booked profits after propelling the price to its highest level in 18 years above $500 the previous day.

Terrorists attacks, rising oil prices, the prospect of more demand in China and reports that Russia, Argentina and South Africa had decided to increase the amount of gold in their reserves have elevated gold's safe-haven appeal this year.

It rose above $500 an ounce for the first time since December 1987 on Tuesday as funds diversified into precious metals on worries about inflation worries and geopolitics.

But dealers said gold could succumb to a quick retracement on position-squaring and profit-taking in the lead-up to Christmas. The long positions in New York's COMEX market would also weigh on sentiment, they said.

Spot gold fell to $495.25/496.00 an ounce in morning trade from $499.70/500.50 an ounce last quoted in New York.