Gold futures in New York ended lower on Thursday as traders lightened up on positions with the dollar firmer ahead of word from the US Federal Reserve on interest rates this afternoon, dealers said. August delivery gold on the New York Mercantile Exchange closed down $1.50 at $437.10 an ounce after moving from $440.30 to $436.70.
The market reversed from climb by the close, as players squared books amid speculation of an interest rate increase that was seen buoying the US currency.
But gold still held above on Wednesday's two-week low in light volume. "Gold's just backing and filling a little bit" before the Fed's decision on rates, said one metals analyst.
The Fed is almost unanimously forecast to raise its key funds rate by a quarter-percentage point to 3.25 percent and is seen signalling more credit tightening ahead, boosting the dollar's appeal.
Higher rates are seen supporting the dollar and possibly weighing on gold. The central bank's policy statement is due at 2:15 pm EDT (1815 GMT).
Final trades at the end of the second quarter on Thursday and Friday's shortened Comex session as well as on Monday's US Independence Day holiday capped the metals market.
New York metals will shut at around noon on Friday. Analysts were sounding neutral on gold for the near-term after prices back-pedalled this week from last on Friday's three-month high at $445.40 in futures.
Independent analyst Greg Weldon said the market's proverbial glass was half-full, relative to other assets overall, after prices were rising against the dollar but breaking down against energy products, real estate and stocks.
The euro was last at $1.2085, up from the prior US close and a cent above 10-month lows set last week. Analysts put resistance in August gold at $441 and then at last on Friday's peak at $445.40, with support at $436.50 and then at $433.50.
Spot gold last changed hands at $437.20/7.90, not far from the late quote on Wednesday at $437.10/7.60. On Thursday's afternoon fix in London was $437.10.
Silver fell in a technical-type sell-off due to the arrival today of first day for delivery notices in the July contract. Benchmark September silver lost 3.0 cents to end at $7.075 an ounce.
"If it breaks the double-bottom support level at $7.06, I think it will touch $7.00. Then, support is at $6.95," said a Comex floor broker.
Front month July shed 2.9 cents to $7.028. Spot silver slipped to $7.02/05 an ounce from Wednesday's close at $7.04/07. The fix was at $7.10.
October platinum fell $3.80 to close at $883 an ounce. Spot platinum fetched $880/883. September palladium gave back $2.20 to $181.95 an ounce. Spot traded at $181/184.