COMEX gold futures slid to two-week lows on Tuesday, hit by a rising dollar amid trader nervousness before comments by the Federal Reserve later in the day, dealers said.
August gold dropped $5.00 to $400.80 an ounce by 11:00 am EDT (1500 GMT), moving from $407.10 to $399.70, its lowest mark since July 7 when it sagged down near $392. Estimated COMEX gold volume was moderate at 19,000 contracts.
Traders said the market was focused on a rejuvenated dollar over the last day as well as the pace and scope of US interest rate increases before US Federal Reserve Chairman Alan Greenspan speaks before the Senate on monetary policy on Tuesday and Wednesday.
Additionally, a lack of buying at the top of golds $390-to-$410 range left dealers moving to pocket profits from gold recent up-move as the greenback advanced, traders said.
Economists expect the Fed chief to pin the June slowdown in the economy on a summer lull and stress that alls running smoothly
The dollar bolted higher Tuesday as markets expected Greenspan to be optimistic about the economy and to maintain "measured" rate hikes. Against the greenback, the euro last traded at $1.2370.
After August gold broke below frail support at last Thursdays low at $401.80, the next key chart level below $400 an ounce was pegged at the $393.30 level.
In the spot market, gold changed hands at $400.00/0.50 an ounce, way below Mondays closing level in New York at $405.70/6.20. Tuesdays afternoon fix in London was at $400.00 an ounce.
September silver chopped lower in sympathy with gold, falling 11.0 cents to $6.49 an ounce, within a range of $6.655 to $6.475. Spot silver hit $6.46/49, from $6.60/62 late Monday in New York. Tuesdays silver fix in London was at $6.575.
NYMEX October platinum was up $1 at $825 an ounce. Spot platinum was last at $830.00/835.00 an ounce.
September palladium gained $3 to $230 an ounce. Spot palladium touched $225.00/230.00 an ounce.
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