Gold falls for third straight day, under $1,650

AP News
Posted: Oct 19, 2011 3:44 PM
Gold falls for third straight day, under $1,650

Gold prices fell for the third straight day Wednesday. Gold has now lost all of the ground gained in this month's rally.

Gold for December delivery fell $5.80, less than 1 percent, to settle at $1,647 an ounce. That's the first time gold closed below $1,650 an ounce since Oct. 7.

Gold hit a record high of $1,891.90 in late August. Prices began to fall after that on worries that gold had risen too high.

Gold prices rebounded this month on worries about inflation. Traders thought a big stimulus plan in Europe would make currencies less valuable. Investors often buy gold as protection against inflation. Doubts about a big European bailout have grown this week. That boosted the dollar against the euro over the last two days.

The leaders of the IMF, Germany, France, and the European Central Bank are preparing for a crucial summit this weekend to shape a rescue package for European banks and heavily indebted countries like Greece.

Expectations about what the summit will produce are changing rapidly. Retiring European Central Bank President Jean-Claude Trichet said the euro zone's debt crisis requires "immediate action" in coming days. But earlier this week, a spokesman for German Chancellor Angela Merkel said a full-scale solution could take months to craft.

On Wednesday, Merkel repeated her warning that "if the euro fails, then Europe fails. But we will not let that happen."

In other trading, copper for December delivery dropped 10.2 cents, or 3 percent, to end at $3.258 a pound. January platinum lost $17.60 to finish at $1,523.10 an ounce. December palladium fell $11.50, or nearly 2 percent, to $608.40 an ounce.

December silver dropped 55.4 cents to close at $31.277.

December wheat fell 5.75 cents to finish at $6.195 per bushel. December corn lost 5.5 cents to end at $6.385 per bushel. November soybeans lost 25.75 cents to end at $12.25 a bushel.

Oil prices also fell. Benchmark oil fell $2.24, or 2.5 percent, to end at $86.29 per barrel on the New York Mercantile Exchange.

Heating oil lost 4.65 cents to finish at $2.9812 per gallon, gasoline futures dropped 7.54 cents to close at $2.6715 per gallon and natural gas gained 3.3 cents, or nearly 1 percent, to $3.586 per 1,000 cubic feet.