NEW YORK, Oct 16: COMEX gold fell on Monday as a gloomy global economic outlook since the Sept 11, attacks trumped anxiety about the use of deadly germs against Americans, dealers said.

Though the yellow metal seemed to be losing some of its luster and the market focused on prospects for reduced jewelry consumption, the US military campaign in Afghanistan was never far from traders’ minds and the jumpy market remained on guard for new developments.

Like crude oil, gold is being inhibited by recession fears and the probability of continued low inflation, wrote Bill O’Neill, head of futures research at Merrill Lynch, in a Commodity Update Monday.

The metal has given back much of its post September 11 flight-to-safety gains, which should not be surprising given gold’s history over the past 10-plus years.

December gold fell $3 to settle at $282.70 an ounce, trading from a high of $286.80 to $282.50.

The move erased Friday’s knee-jerk $3.10 rally. That came with an anthrax scare in New York, where one individual tested positive, apparently after opening a letter carrying the killer bacteria.

Use of the US Postal Service to spread the biological agent is being investigated after similar packages were received in Florida — where one man died from anthrax — Nevada.

While trade selling was the main influence, dealers said a firmer dollar against the euro was also a negative. But a sharply higher Australian dollar and South African rand seemed supportive because they discouraged selling out of those major producer nations.—Reuters