Gold falls from three-wk high as investors weigh rally, Fed

London, Dec 11. Gold today fell from an almost three-week high on speculation the biggest one-day rally since October may slow demand amid concern the Federal Reserve will reduce stimulus. Gold fell 0.4 per cent to USD 1,256.97 an ounce, silver by 0.6 per cent to USD 20.28 an ounce, after touching USD 20.43 yesterday, the highest since November 20. Gold rebounded from a five-month low set December 6 to touch USD 1,268 an ounce yesterday, the highest since November 20. It jumped 1.8 per cent, the most since October 22. A surge in short positions on the Comex to the highest since July became a "bit too crowded," and prices rallied as investors closed out those bets on lower prices. Bullion is set for the first annual drop in 13 years as some investors lost faith in the metal as a store of value and on speculation the Fed will scale back stimulus as the economy improves. Policymakers will probably begin reducing USD 85 billion in monthly bond buying at the December 17 meeting.