Gold prices fell overnight, as investors took profits after a sharp rally the day before. Gold for April delivery closed down 0.9 per cent at $US1,254.30 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices for the precious metal received a boost when the Federal Reserve reined in expectations for higher interest rates this year at its Wednesday meeting. Low interest rates are a boon for gold, which pays its holders nothing and struggles to compete with yield-bearing investments when borrowing costs rise. Gold rose 2.9 per cent on Thursday, and is up around 19 per cent this year. Gold's rally "may have gotten ahead of itself," George Gero, a managing director at RBC Wealth Management, said in a note to investors. But even as some investors locked in gains, other market participants believe that gold is poised to move higher. Besides a dovish Fed, gold prices are also set to receive a boost from a more subdued dollar, which is less likely to rally in the face of lower rate expectations, analysts at HSBC said in a report. Gold is priced in dollars and becomes more affordable to foreign buyers when the greenback declines. At the same, negative interest rates in Europe and Japan are also drawing investors into gold, HSBC said. "Gold can continue to rise, and we see it reaching $US1,300 an ounce by year-end," HSBC said. Silver for May delivery was down 1.4 per cent at $US15.811 a troy ounce.
