Gold futures in New York slid off a 3-1/2 week high to trade a touch lower early on Wednesday as profit-taking capped prices a day after investors piled onto the precious metals bandwagon, dealers said.
Silver rose, meanwhile, and hovered just shy of Tuesday's three-month peak, with resistance at $13.50 an ounce blocking the way higher for now. At the COMEX division of the New York Mercantile Exchange, December gold was down $1.90 at $645 an ounce by 9:43 am EDT, moving between $648.50 - the same near one-month peak from Tuesday - to a session low at $642.10.
Moves in energy and currencies appeared to take a back seat as investors rejiggered positions for a second day after a sluggish market during the summer and Monday's US Labour Day holiday, trading sources said. "This is probably profit-taking, but it's holding well today and it looks like it's coming back," said Frank Aburto, a broker at Rosenthal-Collins Group in New York.
Floor brokers were eyeing $648.50 and then $650 as major resistance points for benchmark COMEX December gold. Spot gold eased to $636.00/637.00 an ounce, after spiking above $640 earlier, from $638.20/9.20 at Tuesday's New York close. Bullion dealers fixed Wednesday's spot reference rate at $636.70 in London.
Standard Bank said, "The current momentum for gold would favour a move higher, with the cross-over of the shorter-term moving averages, ie 9-day crossing above the 18-day moving average, indicating near term strength for the metal to push higher."
In a daily note, Standard said resistance was at $645 and then at $652, with initial support at the 100-day moving average near $633.
Silver's gains continue to outpace gold. The former has climbed about 36 percent in value since mid-June. Gold has risen 16 percent in the same period. COMEX December silver rose 4.0 cents to $13.18 an ounce, in a range of $13.05 to $13.28. Tuesday's high of $13.37 was its best price since May 30.
Spot silver was quoted at $13.02/13.09 an ounce from $12.89/12.96 late on Tuesday. Wednesday's fix reached $12.95. In platinum, NYMEX October futures fell $3.50 to $1,276 an ounce. Spot platinum was stable at $1,268/73. December palladium rose 10 cents to $355.50 an ounce. Spot rose $1 to $349/354.
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