Gold Tests 1,300 USD Again, but Fails to Hold on

CHICAGO, Sept. 28 -- Gold futures on the COMEX Division of the New York Mercantile Exchange tested the psychological mark of 1,300 U.S. dollars per ounce in Monday's morning session and fell back thereafter, closing at 1,298.6 dollars. The silver inched up 7.2 cents in the day.

The most active gold contract for December delivery gained 50 cents, or 0.04 percent, to close at 1,298.6 dollars per ounce, a new closing high in history.

The softening dollar is the most contributive force behind Monday morning's rally. The dollar index, a measure of the U.S. value against a basket of six major currencies, inched down from 79.333 to 79.295 on Monday.

A weaker dollar makes gold cheaper for holders of other currencies so gold tends to benefit as the dollar falls.

However, some analysts say it will be tougher for gold to keep extending the rally from current levels. Following robust growth, the gold market is now under heavier pressure thanks to profit- taking sentiment.

The silver further headed up while platinum reversed. December silver gained 7.2 cents, or 0.34 percent, to 21.471 dollars. In contrast, October platinum closed at 1,630.1 dollars per ounce, shedding 9.7 dollars, or 0.6 percent from the prior trading day.