Gold and other metals slid further Wednesday as the dollar rose for a second straight day.

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Gold and other metals slid further Wednesday as the dollar rose for a second straight day.

Gold for February delivery lost $5.60 to settle at $1,092.50 an ounce on the New York Mercantile Exchange.

Following a months-long trend of trading inversely with the dollar, gold fell as the ICE Futures U.S. dollar index gained 0.1 percent. The index is a widely used measure of the dollar’s performance against other currencies.

Gold is used as a hedge against inflation and a weaker dollar, so demand for the metal tends to diminish when the greenback is stronger.

The price of gold has fallen about 10 percent from a record high of $1,227.50 on Dec. 3 as the dollar has steadied, but is still up 24 percent for the year.

The dollar is likely to dictate which way gold goes next year as well. Many analysts expect the Federal Reserve to raise interest rates before 2010 is over, which would boost the dollar and potentially hurt gold prices.

But a rate hike might also be a boon to gold, depending on how traders look at it. Higher interest rates are used to ward off inflation. If the Fed signals that inflation is becoming a threat by raising rates, gold prices may spike as investors look for ways to safeguard their money.

In other Nymex trading Wednesday, March silver dropped 30.8 cents to $16.802 an ounce, while January platinum fell $14.80 to $1,452.30 an ounce.

March copper futures rose 3.15 cents to $3.345 a pound.

Oil prices edged up above $79 a barrel after the government reported another drop in crude supplies. It is common to see crude levels fall at the end of the year as many companies empty out storage facilities for tax purposes. Supplies have fallen nearly 14 million barrels over the past four weeks, but they are still relatively high compared with previous years.

Light, sweet crude for February delivery rose for a sixth straight day, adding 41 cents to $79.28 a barrel.

Gasoline futures added 3 cents to $2.0406 a gallon, while heating oil futures rose less than a penny to $2.1093 a gallon.

On the Chicago Board of Trade, March wheat futures rose 3.75 cents to $5.4475 a bushel, while corn for March delivery slid 3.25 cents to $4.1375 a bushel.

March soybeans fell 2.5 cents to $10.445 a bushel.