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Last Updated: Thursday, 1 November 2007, 22:03 GMT
Gold price dips from 27-year high
Gold bars
Gold is seen as a haven against political uncertainty
Gold prices ended lower in New York, after hitting a 27-year high, prompted by high oil prices and the weak dollar.

Gold spot prices fell $1.60 to $793.70 an ounce after hitting $799.30 in East Asia trading, its highest since 1980.

Gold prices typically echo movements in oil, as investors see it as a haven against the inflation risk caused by higher crude costs.

Crude oil in New York which had breached $96-a-barrel a barrier earlier, also ended the day lower.

The weakening greenback in recent days had made commodities including gold a more attractive investment, say analysts.

'Complete scenario'

Gold prices have now risen 25% since August.

"High crude oil prices mean high gold prices, and in addition to this you have the weak dollar which completes the scenario for a bull run," said Koji Suzuki, market analyst at Kazaka Commodity.

Gold hit an all-time high of $850 an ounce in January 1980, when investors rushed to buy the metal in the face of high inflation sparked by strong oil prices, the impact of the Iranian revolution, and Soviet intervention in Afghanistan.

After adjusting for inflation, that 1980 price is equal to $2,079 today.

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