Gold in retreat from record high
The price of gold has fallen as investors questioned whether the metal's record-breaking recent surge had gone too far too quickly.
Gold fell more than 2% to $881.25 an ounce on Wednesday.
The drop comes after gold broke through the $900-an-ounce mark, and climbed as high as $914 on Monday.
However, analysts said that many of the concerns about inflation that had pushed gold higher were still evident, and any dip in prices may be temporary.
"Within a few days, the gold price will go back to over $900," said Yukuji Sonoda of Daiichi Commodities.
There are too many bulls in the market
Ronald Leung,
Cheong Gold Dealers
"The next target is $1,000. It won't take a long time to reach $1,000."
At the heart of gold's rise have been concerns about rising global inflation.
Investors tend to buy gold when inflation is accelerating as the metal is seen as being a safer investment than stocks, bonds and currencies.
As well as this flight to safety, there is also demand for gold from China, said Ronald Leung, director of Cheong Gold Dealers in Hong Kong.
Chinese jewellery makers are building up their stocks prior to the Lunar New Year, which starts in early February, he said.
"There's a bit of buying interest below $900," Mr Leung said. "There are too many bulls in the market." |
