Gold declines on speculation that rally has run out of steam
Asian price of Gold fell on speculation that a five-year rally in the metal had come to a close. Last week Gold futures fell 7.6 per cent in New York as investors apparently concluded that the metal's rise to its highest level in 26 years was overdone.
Gold had rallied 41 per cent this year to $732, the highest since 1980.

Asian traders are expecting spot gold to fall to $650 in today's trades.

The metal dropped 8 per cent last week as the dollar rose versus the euro and yen for the first time in more than a month on speculation U.S. interest rates will rise further to contain inflation. Last Wednesday's announcement on U.S. consumer prices, signaled that the Fed may raise interest rates at a faster pace, increasing the value of the U.S. dollar and lowering the value of commodities.

U.S. consumer prices rose 0.6 percent, the Labor Department said on May 17, making it less likely that the Fed will pause its series of rate increases.

Meanwhile a Bloomberg survey has shown that gold may fall below $650 an ounce this week. Eighteen of 36 traders, investors and analysts surveyed by Bloomberg News from Sydney to Chicago on May 18 and May 19 advised selling gold, which fell $54.30 to $657.50 last week in New York. Fourteen recommended buying. Four were neutral.
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Royal Mail seeking alliance for European operations
London: According to a report by the Sunday Times, UK's Royal Mail is in advanced negotiations with U.S. groups FedEx and UPS to set up a strategic European alliance. According to the newspaper, the Royal Mail was now weighing options for a tie-up for its General Logistics Systems, a European parcel operation and the British group's most profitable business.

Quoting a source familiar with the talks, the paper said the attraction for the Royal Mail was that its European parcels business is unregulated.

A European deal combining delivery networks would give General Logistics Systems a commanding position and help it to attack the postal markets of Germany and France.

FedEx is the world's largest air-express carrier while United Parcel Service is the world's largest package delivery company. Both FedEx and UPS have reported strong growth in their international business.

General Logistics Systems handles more than 1 million parcels a day, mostly business-to-business deliveries in 34 European states.
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