Sept. 24 (Bloomberg) -- Gold fell the most in more than two months, closing below $1,000 an ounce, as the dollar’s rebound reduced demand for the precious metal as an alternative asset.
The dollar climbed from a one-year low against a basket of six major currencies. Before today, gold advanced 15 percent this year, while the greenback dropped 6.5 percent.
“You’re seeing significant selling in gold because the dollar is beginning to rise,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois.
Gold’s decline may accelerate after prices failed to rally closer to the record, UBS AG said in a report yesterday. Technical analysis shows the bullish trend can only be maintained should prices surpass $1,032.50, UBS said.
The metal reached $1,025.80 on Sept. 17. Gold jumped to a record $1,033.90 on March 17, 2008.
The Fed’s statement is “theoretically negative for gold, because they took away the wording on inflation, but there wasn’t any talk of rate hikes,” said Tom Pawlicki, an MF Global Inc. metals analyst in Chicago. Gold may climb to $1,100 early next year, he said.
A rate increase would boost demand for the U.S. currency, analysts say