Gold futures fell early Tuesday, correcting from Monday's rally, as a firm dollar and shaky crude oil prices gave longs an excuse to pocket profits and wait for better levels to buy the precious metal again.
"We could dip several dollars and still have this general bull move remain quite intact," said James Steel, senior analyst at HSBC. "We have a weaker oil price today, commodities as a whole are down a little bit. The move yesterday appeared to be largely technical in nature, so I'm not surprised to see some profit taking."
At 9:40 am EST (1440 GMT), December gold at the COMEX division of the New York Mercantile Exchange was $4.30 lower at $603.10 an ounce. It traded between $600.50 and $607.50, after spiking to a seven-week high on Monday at $613.20.
On Monday, investors mostly shrugged off lower crude oil prices and bought gold on worries about slow economic growth in the United States and a weaker dollar.
The December contract closed up $6.40 at $607.40, after earlier being propelled above technical resistance at $608 by buy orders to cover shorts and establish new long positions. The move cleared the long-term declining trendlines that had capped gold rallies last week.
The market was more confident that the lows for the bear market since December gold peaked at $735 in May were put in at $557.10 on June 14 and $563.50 on October 4.
Spot gold bullion was trading at $603.40/4.30, off from the Monday close at $604.00/5.00. Bullion dealers fixed London's morning spot reference price at $600.90 an ounce.
December silver was down 9 cents at $12.16 an ounce, trading from $12.22 to $11.98. Spot silver rose to $12.08/15 from $12.06/13 an ounce. The fix was at $12.08. NYMEX January platinum eased $11.20 to $1,082 per ounce. Spot platinum was priced at $1,073/1,078. December palladium was $7 lower at $321.75 an ounce. Spot palladium fetched $314/319 an ounce.
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