Gold futures in New York rebounded to end higher on Tuesday after a drop toward $600 an ounce a day earlier sparked short-covering and renewed buying. Traders said gold also had attracted more speculative interest thanks to briefly higher oil prices, a shaky dollar and the ongoing war between Israel and Hizbollah in Lebanon.
August delivery gold at the COMEX division of the New York Mercantile Exchange climbed $4.80 to finish at $618 an ounce, after dealing from $611.10 to $624.20. Gold prices initially rose overnight on the Tokyo Commodities Exchange, traders said, on a relief rally after the market held on Monday above support at $600 despite heavy selling.
But profit-taking and a lack of follow-through buying on Tuesday above $624 capped gains. "Gold is consolidating. It is tracing out a huge 'pennant' formation that we think will be resolved to the upside, but it may take days, if not weeks, to do so," he wrote. "Patience shall be rewarded."
Standard Bank said in a report that gold's "impressive bounce" from near $600 to regain the 100-day moving average at $616 in bullion also bodes well for the metal. "Decent buying interest will likely send gold higher after a period of consolidation over the summer," it said. The dollar was steady after data on US consumer confidence and home sales beat forecasts, which raised expectations for an August interest rate increase. Rate hikes tend to be bullish for the dollar and bearish for gold.
Oil prices rose early in the day before slipping back to $73.85 a barrel. Spot gold was quoted at $617.60/619.10 an ounce, compared with Monday's late New York quote of $612.10/2.85. It fell as low as $601.60 on Monday. Bullion dealers on Tuesday set the daily afternoon spot reference rate in London at $618.75.
COMEX September silver rose 2.5 cents to $10.9450 an ounce, trading from $10.80 to $11.08. Spot silver reached $10.89/10.99, from $10.84/10.94. It fixed at $11.01.
NYMEX October platinum jumped 1.7 percent or $20.20 to end at $1,229.50 an ounce. Spot was at $1,217/22. September palladium rose 95 cents to settle at $317 an ounce. Spot palladium was worth $310/315.
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