COMEX gold was hit by a strengthening dollar early Wednesday, but was expected to stay in a trading range as financial markets awaited Fridays important July US employment report to gauge if the economy gathered steam emerging from a sluggish second quarter.
December gold at 10:17 am EDT (1417 GMT) was down $2.80 at $393.70 an ounce. The pullback from an overnight high at $396.70, to a low at $393.00, was hastened when the euro fell below $1.20, which made it more attractive for European investors to liquidate gold holdings.
Gold-supportive market nervousness at the start of the week about a possible al Qaeda plan to attack New York before the US elections receded into the background. Likewise, buying of gold as an inflation hedge abated, even as oil prices reached new highs above $44 a barrel on Wednesday.
Weak construction spending and personal consumption data this week were further confirmation that the economy slowed significantly in the second quarter. Last week gold rallied from 6-week lows after the advance report on second-quarter gross domestic product showed a sub-par 3.0 percent growth rate.
Spot gold was quoted at $390.70/1.20, down from the close at $394.00/4.50 and Wednesday's morning fix in London at $392.70.
COMEX September silver was down 7.0 cents at $6.615 an ounce, trading from $6.69 to $6.575. Spot silver was quoted at $6.58/61, down from $6.65/67. The fix was $6.62.
NYMEX October platinum was off $1.60 at $827.50 an ounce. Spot platinum was quoted at $827.00/832.00.
September palladium was down $1.50 at $216.00 an ounce. Spot palladium fetched $212.00/217.00 an ounce.