Daily Gold Update

Source: CBS.Marketwatch

San Francisco— Gold futures fell Monday to close above $430 for a third session ahead of key U.S. economic data and a decision by the Federal Reserve on interest rates this week.

"The arguments to be long gold — weak dollar, strong physical demand and prospect of lower mine supplies, geo-political instability particularly in the Middle East and global terror threat — all remain," said James Moore, analyst at TheBullionDesk.com in London.

"U.S. data due this week, which includes October retail sales and [the] September international trade report as well as the FOMC rate announcement on Wednesday, looks set to keep market volatility high," he said in a note to clients. "But the bulls still seem firmly in control with $440 the next major target once the $433 to $436 hurdle is cleared."

The metal remains close to a 16-year high.

Gold for December delivery fell 90 cents to close at $433.40 an ounce on the New York Mercantile Exchange after tallying a total gain of $13.50 over the last three sessions. Friday's closing level of $434.30 was the highest closing futures price seen since December 1988.

Taking a look at the bigger picture, "gold, silver, and the euro are overbought and entitled to some consolidation," said Peter Grandich, editor of The Grandich Letter, an investment advisory publication.

But "all the ingredients that got us to this point remain intact," he said, adding that "gold remains off the radar of most investors, and the mainstream financials bode well for those of us who envision $500-plus."

Other metals futures took their cue from gold to close broadly lower.

December silver fell 1.8 cents to close at $7.487 an ounce, while December copper lost 0.15 cent to end at $1.3615 a pound. The January platinum contract shed $2.30 to close at $849.60 an ounce, with December palladium closing at $217.50 an ounce, down 20 cents.

Tracking inventories, copper supplies were down 517 short tons at 43,543 short tons as of late Friday, according to Nymex. Silver stocks were down 99,871 troy ounces at 103.7 million, while gold inventories stood at 5.35 million troy ounces, up 13,623 from the previous session.