Gold futures in New York fell to a three-week low on Thursday, clobbered by speculative selling due to weak technicals and declining oil prices.
As liquidation spilled over into other precious metals and copper, palladium reversed its earlier gains and slipped off a 2-1/2 month high in late US trade, dealers said.
Benchmark December delivery gold closed down $13.70, or 2.1 percent, at $625.30 an ounce on the New York Mercantile Exchange's COMEX division, after trading from $642 to $623.50, which was its cheapest price since July 25.
One New York trader said futures retreated sharply after spot gold failed for the fourth straight day to climb above resistance at $633 an ounce.
Dealers said COMEX December gold now was supported at $620, $610 and at $600 an ounce, with resistance at $650.
Frank Aburto, a broker at Rosenthal-Collins Group, said that liquidation in gold also continued "in view of the cease-fire in Lebanon holding for the time being. Geopolitical instability tends to support gold in its role as a safe haven investment during difficult times.
At midafternoon, the euro was hardly changed at $1.2815. A firmer dollar often reduces purchases of dollar-denominated assets like gold in overseas markets. In a quarterly report, the WGC measured total gold demand for the second quarter at 801.6 tonnes, a 16 percent drop from the year-ago quarter. Price volatility, more than gold's surge to 26-year highs during the quarter, hurt jewellery purchases.
Spot gold dipped to $615.10/615.85 an ounce, way below Wednesday's late New York quote at $627.00/7.80. Thursday's afternoon fix in London was at $625.50. COMEX September silver dropped 29.0 cents to $11.9950 an ounce, near the bottom of a $12.42-to-$11.98 band.
Spot silver sank to $11.94/12.04 an ounce, compared with $12.25/35 late Wednesday. It fixed at $12.28 on Thursday.
NYMEX October platinum fell $17.70 to settle at $1,233.30 an ounce. Spot platinum was at $1,230/1,235.
September palladium slipped 55 cents to end at $335.85 an ounce. Spot palladium was quoted at $336/341 an ounce.