Gold futures closed down from a 16-1/4-year peak on Tuesday as speculative liquidation pressured the overbought market, but prices remained above $450 an ounce, buoyed by a generally soft US dollar. Resistance leading up to the $460 area and a slight loss of buying power after gold's recent rally also were capping prices, dealers said.
"Gold is showing signs of correcting today after a barrage of economic data from the US, light month-end book-squaring and possibly some year-end profit taking," said James Moore at TheBullionDesk.com.
Gold for delivery in February on the New York Mercantile Exchange's Comex division fell $2.60 to settle at $453.20 an ounce, after trading between $456 and $450. Nearby December gold slid $2.40 to $451.30.
Estimated volume reached 90,000 contracts. After the euro hit a record $1.3334, gold weakened as the dollar recovered after faster-than-expected US economic growth was reported for the third quarter. A firm dollar typically hurts immediate investment demand for dollar-denominated gold from overseas traders.
GDP, the measure of all goods and services within US borders, grew at a 3.9 percent annual pace from July to September, up from 3.7 percent estimated a month ago, the Commerce Department said on Tuesday.
Meanwhile, the US Conference Board's consumer confidence index fell to 90.5 in November from an upwardly revised 92.9 in October. The market had expected a reading of 96.5 in November.
Closely eyed Commitments of Traders data from the Commodity Futures Trading Commission showed the speculative net long position in Comex gold futures rose to 138,632 contracts as of the November 23 week from 123,001 lots on November 16.
The fund buying was supportive to gold, IFR Markets analyst Tim Evans said, but the huge long exposure, which was the third highest in recent memory, confirmed the market's overbought status, which rivals the 144,253-lot extreme from April 6.
"With new price highs already this week, the market may already be challenging that record," Evans said in a report. "That leaves gold particularly vulnerable to any corrective upswing in the dollar, which could well be due after logging 10 consecutive weekly declines."
Evans pegged technical resistance in Comex February gold at $460 and support down at $450 and $448.20. Spot gold last fetched $450.50/1.25, off from Monday's New York close at $453.30/4.05.
On Tuesday's afternoon fix in London was at $453.40. March silver futures fell 4.8 cents to $7.777 an ounce, within a range of $7.87 to $7.71. The session peak was silver's highest since April, but traders said selling emerged with the market sitting overbought for the last two days.
CFTC data showed the fund net long position in Comex futures rose to 65,758 lots from 57,177 lots previously. Nearby December silver lost 4.7 cents to $7.723. Spot silver was at $7.68/71 from $7.77/80 previously.
It fixed in London at $7.755. Nymex January platinum rose $6.90 to $872.30 an ounce. Spot platinum hit $865.00/869.00. March palladium slipped 65 cents to $213.10. Spot palladium touched $208.00/212.00.
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