Gold News & Info

Source: Reuters

New York— U.S. gold futures settled lower but still within a well-worn range on Wednesday as the dollar bounced back after a two-day sell-off following a narrower U.S. trade deficit than expected in May.

Silver ended lower in thin turnover, but traders were eyeing gyrations in COMEX inventories to see if some commercial players might be buying on price dips, dealers said.

August delivery gold slid back $2.50 to end at $424.60 an ounce on the COMEX division of the New York Mercantile Exchange, after dealing from $428 to $424.

Prices mainly aped moves in the euro after the U.S. government reported the trade gap in May narrowed to $55.35 billion, lower than the forecast for a $57 billion shortfall, easing concerns about U.S. external financing problems.

After a muted European session, "gold traded sideways until the U.S. open, when the dollar's reaction to the trade data prompted further offers," James Moore, analyst at TheBullionDesk.com, said.

Gold's rally over the past three years was partly due to the huge U.S. trade gap, which pushed the dollar into a 30 percent decline against the euro by the end of last year. However, this year, rising interest rates have capped gold while the dollar has firmed.

By afternoon, the euro was off at $1.2092, compared with $1.2235 late in New York on Tuesday. A stronger dollar weighs on dollar-priced gold as it gets costlier for traders holding foreign currencies.

Dealers said trader profit taking also seemed to pressure gold after it hit resistance above a short-term trend line.

Volumes have been light in gold and prices confined to a range due to summer holidays, after liquidation-type profit taking by funds starting late in June shoved prices off from three-month highs near $445.

"In the current slow conditions, gold looks comfortable in its $420-430 range with the dollar providing the large part of the market's intraday direction," Moore said.

According to analysts, COMEX August gold should struggle to clear resistance at $428 to $430 an ounce, with support resting down at $422 and $420.

Spot gold changed hands at $423.80/4.50 an ounce, off from the late New York quote on Tuesday at $426.10/6.80. Wednesday's London morning fix was at $425.55.

In silver, September futures shed 1.5 cents to end at $7.07 an ounce, after moving from $7.125 to $7.06.

Dealers said physical buying in silver has been done on dips to $7.00/oz or below.

Big swings seen over the last week in COMEX warehouses continued, with stocks tumbling 135,594 ounces to 105,504,083 ounces early Wednesday, after previously jumping about 317,000 ounces.

Spot silver dipped to $7.01/04 from $7.03/06 late Tuesday. London's fix was at $7.0350.

October platinum lost $1.90 to close at $872.80 an ounce. Spot was stable at $871/875.

September palladium fell $2.50 to $182.35 an ounce. Spot was flat at $181/185.