Gold futures snapped a six-day winning streak as some investors chose to collect the profits on their gold holdings while a stronger stock market further tarnished gold's appeal. The most actively traded contract, for December delivery, fell $30.60, or 1.6 percent, to $1,861.30 a troy ounce on the Comex division of the New York Mercantile Exchange. The contract had touched an intraday record of $1,917.90 a troy ounce. Thinly traded August-delivery gold settled $30.40, or 1.6 percent, lower at $1,858.30 a troy ounce after touching an intraday record high at $1,909.30. Gold's declines come after four consecutive days of record settlements and as prices locked in a 16 percent gain since the start of August. “We've come a tremendous distance and some consolidation and profit taking is not unexpected,” said Frank McGhee, a precious-metals dealer with Integrated Brokerage Services in Chicago. The Standard & Poor's 500 index climbed 1.6 percent in recent trading, luring some investors out of precious metals and into riskier assets like stocks. The inverse relationship between gold futures and stocks has strengthened to a level not seen since July 2008. The 30-day average correlation between gold and stocks recently hovering at 0.9, on a scale in which -1 is the strongest possible negative reading. “You have a rebound in stocks today, and gold is trading contrary to stocks,” McGhee said. Increased gold price volatility is also making some investors cautious as talk of higher gold margins hangs over the market. The Chicago Board Options Exchange Gold Volatility Index was recently up 0.5 percent at 33.25. The measure, like the CBOE's Volatility Index, tracks the market's expectations for swings in gold over the next 30 days. Shanghai Gold Exchange raised its gold trading deposit requirements.
