The gold futures in New York declined sharply on Wednesday as the oil prices tumbled.

The US Energy Department said on Wednesday inventories of crude oil rose 6.68 million barrels to 325.4 million barrels last week. Crude oil for February delivery plunged US$5.95, or 12.2 percent, to US$42.63 a barrel on the New York Mercantile Exchange.

The gold market showed signs of attempting to throw off early weakness resulting from the crude oil, which is believed king of commodities by market participants, but in the end a quasi deflationary environment and the fear of too much economic slowing left the bear camp with an edge.

Gold futures for February delivery dropped US$24.30, or 2.8 percent, to US$841.70 an ounce.

The weakness in the US dollar failed to provide the gold bulls with much support.

(Xinhua News Agency January 8, 2009)