Gold lingers above $1014 an ounce

Precious-Gold little changed today but still near its 18-month high as the dollar is traded at its lowest level this year.

Gold advanced 16% this year and recorded its second historical high as fears of economic recession, high inflation risks, and the dollar's weakness boosted demand on the metal. Yesterday, gold added $11.60 or 1.16% to close at $1014.26 an ounce. Gold Prices were setin London on Tuesday at $1014.00 an ounce, declining from $1015.75 an ounce during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, remained at 1,101.735 metric tons on September 22.

Today, there may be some sell off by some investors after reaching 18-month high like what happened when the price touched above $1030 an ounce 6 months ago. Other investors, on the other hand, are awaiting results of the FOMC meeting where it is expectations that they may stop purchasing bonds as the recession recedes. Meanwhile, there are some talks with regard stopping methods of quantitative easing after the progress witnessed. Actually this may reduce the appeal of the shiny metal as an inflation hedge.

Moreover, the G20 in their meeting this week they are anticipated to continue their policies to enhance growth and reduce trade imbalances; the thing that is putting more pressure on the dollar as refuge. The U.S. dollar is currently traded at its lowest level versus a basket of major currencies, especially the euro. The dollar index is now at 76.08 slightly changed from its opining. However, an upside correction by the dollar may occur as it became oversold.

With regard to other commodities, oil fell today after the release of an industry report showing an unexpected incline in U.S. crude inventories. Oil's decline may reduce the appeal of gold as a hedge against oil-led inflation. Prices of oil failed to gain support from stocks which rose yesterday in the U.S and today in Asia.

Spot gold is now being traded at $1014.44 an ounce recording a high of $1018.57 and a low of $1014.40.