US gold futures erased early gains to trade lower on Tuesday, as an initial global stock rally and a plan by the US Treasury to inject $250 billion into banks reduced bullion's appeal as a safe store of value, dealers said. December gold was down $1.20 at $841.30 an ounce at 11 am EDT (1500 GMT) on the Comex division of the New York Mercantile Exchange.
Gold gave up initial gains after hitting a high of $857.40. Its low was $833.60. Gold turned negative after the Treasury Department detailed a plan to inject $250 billion into beleaguered US banks to beat back a credit crisis that threatens to swamp the economy. Gold could be vulnerable in the short term as the US bank rescue plan showed the resolve of the policy makers to tackle the credit crisis, Jeffrey Nichols, managing director at American Precious Metals Advisors said.
Comex estimated 9:00 am gold volume at 42,239 lots, options turnover seen at 1,390 lots. Spot gold was at $836.70/839.70 an ounce, up from Monday's nominal close of $830.80. Nymex December silver was up 12 cents, or 1 percent, at $10.910 an ounce. December silver traded from $10.725 to $11.195 an ounce. Comex estimated 9 am silver volume at 7,315 lots.
Spot silver was at $10.81/10.89, up 1.5 percent from Monday's nominal close of $10.65. Nymex January platinum was up $29.40, or 3.0 percent, at $1,027.00 an ounce. Spot platinum was at $1,007.50/1,027.50. December palladium eases 75 cents to $203.05 an ounce. Spot palladium was at $198.00/206.00.