After U.S. Federal Reserve chairman Ben Bernanke announced last week that the institution he leads will embark on a third round of quantitative easing, bullion embarked on a rally that saw it advance well beyond the milestone price of $1,700 per troy ounce. But demand for the yellowish metal also is a potential consequence since the intervention might prompt inflation.
"I would simply call it profit taking, if you want. But I think it's within the range of a solid performance that we've seen over the last two weeks or even a month. So nothing unusual," analyst Dominic Schnider with UBS Wealth Management in Singapore told the news source. "So from that angle, the view doesn't change. $1,950 remains the three-month target on the back of investors searching for real assets, the need for real assets. The risk for further dollar weakness is clearly here a supportive factor."
At 1:59 p.m. on Tuesday, gold futures edged down 0.06 percent, a $1 loss to $1,769.60 per troy ounce.
The Wall Street Journal reports the precious metal achieved its highest price in six months last week following the Fed's announcement.