Platinum and silver recoiled from their highs amid heavy profit-taking on Tuesday. Gold fell too as the dollar firmed but it lagged the other metals just like it did during on Monday's precious metals buying spree.
April platinum retreated the furthest. It ended down $30.60, or 3.4 percent, at $875.50 an ounce, after hedge funds chased it up to its first close above $900 since March 1980 just yesterday.
"Let's see if the funds come back in buying the dips like they've done," said James Pogoda, a precious metals vice president at Mitsubishi International Corp.
"Everything's getting clobbered. Base metals are all coughing it back out from yesterday, and in platinum we could see another leg down if we break below $875."
Spot was last quoted at $873.00/878.00, down from Monday's close at $900.00/905.00. June palladium fell $2 to $240.85 an ounce.
Spot fetched $237.50/243.50, off from $239.50/245.50 last night.
Dealers said there was no news behind the run-up in metals on Monday, which was part of a broad commodity rally that took the Reuters/CRB Index to a 20-year high.
The main factor was weakness in the dollar, which hit it's lowest ever against the 5-year-old euro last month. But its strength in recent days has actually raised the cost of commodities to investors holding foreign currencies.
The euro fell to $1.2195 on Tuesday, its lowest since December 15, from $1.2465/71 late on Monday. "There were some stops below the $1.2350 level and that's when gold got sucked down and silver got sucked down," Pogoda said of pre-placed stop-loss orders to sell when the euro broke the bottom of its 2004 range.
May silver tumbled 22 cents to $6.725 an ounce, trading from $7.00 to $6.70, handing back almost all of Monday's gains.
It set a 6-year high on Monday at $7.03. Spot silver last fetched $6.71/73, down from $6.91/93 late on Monday.
On Tuesday's London fix was at $6.86. Now that gold has run out of steam to the upside after peaking at a 15-year high in January, funds turned their guns on silver and platinum because they have fewer participants and the markets are easy to move. This generated exaggerated price moves and wide daily trading ranges.
April gold settled down $5.80, or 1.5 percent, at $393.80 an ounce after trading $401.90 to $391.20. Dollar disinvestment lifted the contract to $432.30 on January 6.
But the safe-haven metal saw investor interest diminish as the dollar fought back in recent weeks.
Spot gold closed at $392.95/3.45, down from $398.90/9.60 last night. The London afternoon fix was $395.75.