Comex gold ended lower on Monday, as a strong dollar and weak silver and crude oil prices took the steam out of a safe-haven rally on worries about political tensions in the Middle East.
Gold rallied tepidity at the open after Iran said it detained three British navel vessels in its waters and arrested eight crew, but was capped short of psychological resistance at $400 an ounce.
"Silver broke along with the oil and hit a bunch of stops and I think we just went out on pretty much of a low note," said James Quinn, commodity commentator at A.G. Edwards. "With the exception of maybe some Fed talk and weaker oil, there really wasn't much else featured."
August gold settled down $1.20 at $394.50 an ounce. It hit a 19-day height at $397.90 and a low of $393.20. Estimated volume was a Very light 34,000 contract.
Dealers said funds were gung-ho to try for $400 after on Fridays $6.20 gain, but were daunted by a firmer dollar and strong moving-average resistance.
Plus, financial markets were bracing for a triple-decker news day at the end of the month, anticipating quarter-end book squaring, the handover of power to the Iraqi interim government and possibly an interest rate hike at the June 29-30 Federal Open Market Committee meeting.
"The end of June is a potential powder keg of things going on," said a bullion trader. "The 100 and 200-day moving averages are going to prove to be difficult resistance to take out," he said, referring to $400.50 and $398.70 for August gold.
"If it gets through $400, its got some room because it would have broken through these moving averages." Spot gold closed at $393.40/4.15, off from $394.90/5.65 late on Friday. The fix in London was at $395.25.
Comex July silver fell 12.3 cents to $5.86 an ounce. It failed to hold gains after rising to its own 19-day high at $6.05, accelerating down to $5.74 on stop-loss selling. Spot silver was last at $5.84/86, down from the close at $5.97/99.
London's fix was $5.94. "There was a fund stop that got elected right around $5.90," a floor broker said of a large pre-placed order.
Nymex July platinum rose $4.60 at $813.90 an ounce and hit at 12-day high at $818.50. '
Spot platinum was last quoted at $811/816. September palladium slipped 75 cents to $229.25 an ounce. Spot palladium fetched $224.50/229.50.