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Gold eases after nearing record on stock market jitters

Published 08/21/2011, 07:59 PM
Updated 08/21/2011, 08:04 PM
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SYDNEY, Aug 22 (Reuters) - Spot gold > eased after nearing last week's record high in early trading on Monday as investors sold back some safe-harbour positions ahead of a volatile start to share markets.

Gold sold for as much as $1,876.81 an ounce, just under Friday's intra-day high of $1,877. At 2328 GMT, spot gold was quoted at $1,866.84 an ounce.

Bullion dealers said gold retreated as some investors took profits to buy equities perceived as cheap after sell offs tied to the turmoil in The U.S. and European economies, but would not rule out another test of the record price.

"In the short term, there will be enough steady interest in gold from negative market cues, to keep us moving up at the current $1,860-$1,880 range," London-based gold dealer Sharps Pixley said in a statement emailed to Reuters.

"But unless there is a new major crisis popping up anytime soon, we feel that gold is currently over-brought and should see a small correction," it said.

The bullion market is awaiting Friday's conference of central bankers in Jackson Hole, Wyoming. Some analysts said Federal Reserve Chairman Ben Bernanke could unveil a third round of quantitative easing to revive economic growth.

U.S. gold futures for December delivery raced to a high of $1,879 an ounce, well above Friday's close of $1,852.20 an ounce.

Silver was up slightly to $43.64 after rising 4.5 percent to $42.40 an ounce on Friday.

Asian stocks are set for a soft open on Monday, as a resurgence of fears of the United States falling back into recession and Europe's continuing debt problems weighs on markets.

Wall Street ended a fourth week of losses with no let-up in the negative sentiment. The main indices fell around 1.6 percent, with a dismal outlook for Hewlett-Packard the latest blow. (Reporting by James Regan; Editing by Ed Davies)

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