US gold futures fell 1.6 percent to hit a one-month low Tuesday, as traders mostly ignored soaring oil prices and instead trimmed positions after the dollar rose on an upbeat consumer confidence report.
December delivery gold was down $7.50 at $433.90 an ounce at 11 am EDT on the New York Mercantile Exchange's COMEX division, trading from a session high of $441.90 to $433.50 - its lowest mark since July 29. Futures plummeted through support initially at $440 before sinking further below $438 on currency-related selling and heavy fund liquidation, traders said.
Gold garnered only slight support from crude oil back above $70 a barrel in the wake of Hurricane Katrina, as traders reacted more to fund selling and technical considerations in the market.
Traders had been bracing for a sharp sell-off by speculators because of a record-high fund long position in COMEX gold futures.
The net fund long exposure rose to 159,687 contracts in the week ended August 23 - a new record high - compared with the previous record net long at 157,607 lots on August 16, according to Commitments of Traders data from the Commodity Futures Trading Commission.
The dollar, after an early rise, ticked higher against the euro after the Conference Board's consumer confidence index rose in August to 105.6 from a revised 103.6 in July. Spot gold fell to $429.50/430.00 a troy ounce, down from New York's late quote on Monday of $436.70/437.50.
Oil firms were assessing damage wrought by Hurricane Katrina's rampage through the Gulf of Mexico, where most oil and gas production remained at a standstill.
Gold, which is seen as a classic hedge against inflation, tends to benefit from higher oil prices. In NYMEX trade, October platinum fell 1.9 percent, or $16.90, to $887.50 an ounce. Support was viewed at $885. Spot platinum fetched $887/890.
December palladium shed $1.80 to $183.20. Spot was down at $182/185. COMEX December silver eased 3.0 cents to $6.765 an ounce, in a range of $6.825-6.705. Speculators are rolling positions in September futures into December before metal delivery begins on Thursday. Spot silver fell to $6.69/6.72 from Monday's New York close at $6.72/75.