Gold Goes Lower Following Yesterday's 28-Year Peak

Source: Thomson Financial  (10/30/07)

...Players positioned themselves ahead of tomorrow's Fed decision which is expected to reveal an interest rate cut in the world's biggest economy. Such a move would most likely pressure the dollar lower and increase gold's value.

Gold continued lower on profit taking having hit a 28-year high yesterday and as players tracked the dollar which came off lows against the euro.

Dollar weakness, with the greenback hitting a record low against the euro yesterday, helped the metal yesterday but the US currency has since picked up and so gold has come off.

Dollar-denominated gold moves in the opposite direction to the US currency, as its strength makes the metal more expensive for those trading in other currencies.

"Gold's seemingly tireless rally was interrupted by an unexpected rise in the dollar and the resumption of output by Mexico's Pemex," said Kitco analyst Jon Nadler...

Players positioned themselves ahead of tomorrow's Fed decision which is expected to reveal an interest rate cut in the world's biggest economy. Such a move would most likely pressure the dollar lower and increase gold's value.

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