Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures on Wednesday posted their first loss in three sessions as strength in the U.S. dollar amid rising fears about Italy�s debt outlook, as well as a failure to finish above the key $1,800 level a day earlier, dulled demand for the precious metal. Gold for December delivery fell $7.60, or 0.4%, to settle at $1,791.60 an ounce on the Comex division of the New York Mercantile Exchange, after tapping a high of $1,801.10 earlier. Prices tallied a gain of around $43 an ounce in the last two trading sessions so they�re still up more than 2% for the week so far. �Gold offers financial insurance, not a knee-jerk safe haven,� said Adrian Ash, head of research at BullionVault.com.

�The marginal price tick-by-tick is set by action in the futures market, and besides Japan or the U.S. collapsing, it�s hard to think of a more deflationary event for global credit than Italy�s current mess,� he said. �Just as we saw with Lehman, that�s necessarily going to push leveraged speculators out of all derivatives products.� Prices closed Tuesday at the highest level for a most-active contract in nearly seven weeks, but failed to close above $1,800 even after spending part of the trading session at those levels. On Wednesday, prices fell back as �strength in the dollar weighed on the demand for the bullion,� analysts at ICICI Bank said in a note to clients. �Profit booking as prices surged above $1,800 an ounce [on Tuesday] also added to the losses.� See full story.