Gold futures dropped on Tuesday, retreating from the previous session's sharp gains as stabilising US stocks decreased gold's value as a trusted safe haven, traders said. December gold was down $5.10 at $903.90 an ounce on the Comex division of the New York Mercantile Exchange at 10:42 am EDT (1442 GMT).
December traded in a wide range from $885.00 to $915.20. The notion of calming global stock markets after a massive US government rescue plan discouraged investors from buying gold, FC Stone commodity broker George Nickas said. Losses were limited in gold amid buying momentum after bullion holdings of the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, rose 30.2 tonnes, or 4.4 percent, to a record 709.62 tonnes.
Oil eased after Wednesday's solid gains due to expiration of the front-month contract and a weaker dollar. Profit-taking seen in gold on Tuesday as sharp oil rally in the previous session prematurely drew buyers into the bullion market, and gold looked expensive after recent fast-paced gains, Nickas added. Dollar rose against the euro and the yen after losing ground to major currencies in the previous session.
The value of the dollar will still be the major driver for gold in the near term, Nickas said. Comex estimated volume at 9:00 am at 59,972 lots, while options turnover was 3,069 contracts. Spot gold was quoted at $897.20/898.70 an ounce, down 0.3 percent from gold's nominal Monday close of $900.20.
December silver was down 4.5 cents at $13.405 an ounce, as silver followed gold's rally. Silver surged to a high of $13.750. Its low was $13.145 an ounce. Spot silver was at $13.32/13.40 an ounce, down 0.6 percent from Monday's nominal close of $13.40 an ounce.
Nymex October platinum was down $15.80, or 1.3 percent, at $1,220.00 an ounce due to broad-based commodity weakness. Spot platinum was at $1,207.50/1,227.50. December palladium was down $4.85, or 1.9 percent, at $250.90 an ounce. Spot palladium was at $253.00/261.00 an ounce.