Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures closed slightly lower Thursday, with the U.S. dollar turning higher in the wake of mixed durable-goods data and a fall in new-home sales.

"The conditions [for gold] seem to project sloppy to sideways and perhaps even lower pricing ahead," Nell Sloane, an analyst at NSFutures.com, said in daily commentary. "However, the December gold contract appears to have pretty solid support above the $625 level."

Gold for December delivery settled down $4.50 at $628.50 an ounce on the New York Mercantile Exchange. Prices have already fallen $6.70, or 1.1%, over the past three sessions.

New orders for U.S.-made durable goods fell 2.4% in July on a big decline in orders for transportation goods, the Commerce Department said Thursday. But excluding the 9.6% drop in transportation goods, durable-goods orders rose 0.5%, the 10th increase in the past 12 months.

Sales of new homes dropped 4.3% in July to a seasonally adjusted annual rate of 1.07 million, the Commerce Department said Thursday. Inventories of unsold homes rose to an 11-year high, while median prices flattened out.

Against this backdrop, the dollar erased earlier losses to trade up 0.1% against the yen and up 0.1% against the euro, which helped lean on the price of gold.

"Just as the euro/dollar has been stuck within a rather small range for these past several weeks, and has become stuck in an even tighter range in the past several days, so too gold," said Dennis Gartman, editor of The Gartman Letter.

The metal is encountering strong resistance at the $628-630 level, but equally strong support at the $619-621 range and that's unlikely to change in the near-term, he said.

"Barring some wholly unforeseen political and/or economic news in the next several days, it is entirely possible… indeed it seems rather likely… that gold shall remain stuck within this range until the trading population returns to more normal levels in early September as European traders return from the long August holiday period and as North American traders return from the U.S. Labor Day holiday," he said.

Other metals were mixed. September silver futures erased earlier gains to settle down 20.5 cents at $12.31 an ounce, October platinum erased earlier losses to close up $1.20 at $1,237.70 an ounce and September palladium slid $2.40 to $344.45 an ounce on NYMEX.

September copper shed 3.65 cents to $3.4285 a pound.

On the supply side, gold inventories were down 18,168 troy ounces as of late Wednesday, according to data from the New York Mercantile Exchange.

Silver supplies fell by 198,666 troy ounces to 103.5 million troy ounces. Copper supplies rose by 947 short tons to 9,640.

Also Thursday, indexes that track metals and mining stocks headed higher following Wednesday's modest decline.

The Philadelphia Gold and Silver Exchange Index was last at 145.58, down 1.5%, while the CBOE Gold Index declined 1.8% to trade at 147.14. The Amex Gold Bugs lost 1.1% to 341.79.