US gold futures rebounded to finish $3 higher on Tuesday after the previous session's solid losses as a sharply weaker dollar prompted bargain hunting among bullion investors. However, analysts said record high levels of net speculative long positions in the gold futures market could prompt a near-term correction before prices could test the psychological $800 level.
"The dollar's taking a beating here. So we are just getting a little rebound from yesterday's lower close," said Joseph Gizzard, a floor trader with Saibu Commodities in New York. Most-active December gold on the Comex division of the New York Mercantile Exchange settled up $3.10 at $763.10 an ounce after trading between $756.80 and $765.50.
The US Commodity Futures Trading Commission said in its latest Commitment of Traders report that speculative net longs in Comex gold rose 5.9 percent in the week to October 16, after the previous week's gain of 8.4 percent.
Comex estimated on Tuesday's 1:00 pm EDT (1700 GMT) volume at 81,297 contracts, and gold options were estimated at 9,911 lots. Turnover in Chicago Board of Trade electronic 100-oz gold futures was 18,814 lots at 2:21 pm. Looking forward, analysts said economic data this week and the stocks market could set the tone for bullion trading.
"Watch for home sales data and keep a sharp eye on stock markets as their prospects in the near term appear to have a marked and parallel-oriented influence on the yellow metal," Nodular said. Existing home sales data will be released on Wednesday and new homes sales on Thursday. The reports come a week before a Federal Reserve meeting where the US central bank is expected to cut interest rates.
At 2:15 pm EDT (1815 GMT), spot bullion traded at $759.20/760.00, compared with the on Monday New York close at $752.90/753.70. London bullion dealers fixed the afternoon spot reference price at $758.25. Comex December silver closed up 9.5 cents at $13.650 an ounce, trading between $13.505 and $13.720.
Spot silver was quoted at $13.58/13.63, higher than on Monday's late New York quote of $13.43/13.48. London silver was fixed at $13.57. Nymex January platinum gained $13.20 to end at $1,453 an ounce, after rising toward its contract record high of $1,459.20 set last on Friday. Spot platinum was quoted at $1,445/1,449. December palladium closed up $1.25 at $366.40 an ounce. Spot palladium fetched $360/365.
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