Gold declines on profit taking

Gold futures on the COMEX Division of the New York Mercantile declined on Thursday, as some investors opted to take profits after Wednesday's hefty rally. Besides, a stronger U.S. dollar also pared the appeal of gold as an alternative investment. The most active gold contract for December delivery dropped 14. 1 U.S. dollars, or 0.8 percent, to 1,668.5 dollars per ounce. Market analysts said that speculators may have taken profits in the gold market after a 1.3-percent rally in the previous trading day, weighing on the market sentiment. Besides, a stronger dollar in early trading added to the negative tone. Gold had slumped in recent weeks as worries about the euro zone ' s sovereign-debt crisis grew and some investors sold positions in the metal to raise cash to cover investment loss in other markets. However, strong physical demand, mainly from Asia, is likely to prevent a sharper price pullback, said a trader. Silver for December delivery plunged 1.122 U.S. dollars, or 3.4 percent, to 31.667 dollars per ounce. Platinum for January delivery also lost 22 dollars, or 1.4 percent, to 1,532.4 dollars per ounce.