Gold Again at Multiyear High

Gold showed continued strength Wednesday following the decision by the Federal Reserve a day earlier to cut key interest rates.

December-dated contracts were recently trading at $730.40 an ounce, up $6.70 from when the previous session ended Tuesday, but off its intraday peak of around $735 -- a level last seen in 1980.

The bullion exchange-traded funds, which hold inventories of gold, were slipping. The streetTracks Gold Shares(GLD) was off 0.3%, and the iShares Comex Gold Trust(IAU) eased 0.2%.

"The [half-point interest] rate cut proved extremely bullish for gold and the majority of the commodities spectrum," writes James Moore, an analyst at TheBullionDesk.com in London, in a research report.

He also notes that bullion holdings by the streetTracks Gold Shares ETF hit 575.57 tons, an increase of 61 tons, or $1.4 billion, over the past month.

Other news out indicating a drop in consumer prices during August did little to stem the bullish sentiment for gold. Some investors buy bullion as a long-term hedge against the portfolio-withering effects of inflation.

From a technical analysis perspective, gold is now in relatively uncharted territory, Moore adds. The previous highs of above $800, made in 1980, were so short-lived and so long ago that they represent only marginal chart resistance, at best, he says.

Elsewhere, copper contracts were tacking on 10 cents at $3.55 a pound, while silver prices were ahead 14 cents at $13.07 an ounce.