Gold Slides On Profit Booking

Gold dropped on Wednesday as buying interest subsided after an oil-driven rally the previous day, and dealers expect volatility to persist with a firming U.S. dollar weighing on sentiment.

Gold powered to a record high of $1,030.80 an ounce on March 17 but tumbled to a two-month low of $872.90 in early April in the down draft of a broad commodities sell-off.

It has firmed since then, but is struggling to retest a key resistance of $950.

Gold was trading on Wednesday in Asia at $925.60/926.40, below late New York levels of $927.60/928.40.

It was backing away from an intraday high of $936.50 on Tuesday when oil hit a record high above $114 a barrel and lifted gold's appeal as a hedge against inflation.

Gold has risen more than 20 percent in 2008 on speculative buying ignited by rising oil prices and expectations of further interest rate cuts in the United States, which reduce the dollar's appeal.