Source: CBS.Marketwatch
San Francisco— Metals futures closed broadly lower Tuesday, pressured by strength in the U.S. dollar after China signaled it won't be revaluing its currency again anytime soon.
Strength in the dollar often dulls investor interest for gold in particular.
The dollar's gains came after China's central bank said it would be misleading to speculate that there will be further reform moves regarding the yuan following its 2.1% revaluation last week.
Against this backdrop, gold for August delivery closed at $423.50 an ounce on the New York Mercantile Exchange, down $2.40. Prices retreated as low as $422.20 earlier, the contract's lowest since July 20, after closing Monday's session at a two-week high.
Tuesday's Nymex action "keyed off two reasons: one being the dollar's strength but also some rollover action out of August," said Thomas Hartmann, an analyst at Altavest Worldwide Trading.
Traders are turning their attention to the December gold contract, which closed at $429.30 an ounce, down $2.50.
Breaking out?
"Since the November high, gold has put in a series of lower highs and higher lows," said Dale Doelling, chief market technician at Trends In Commodities.
"Once this consolidation pattern or sideways trading period has run its course, the market will break out of this pattern — although there's no way of telling which way it's going to go when it does," he said.
Doelling himself believes prices will "break out to the upside with gold pushing significantly higher over the next 18 to 24 months." This is in keeping with his view that the "dollar is going to take it on the chin soon and the precious metals will benefit from the slide."
But Hartmann believes that it's best to be short in the gold market at the moment. Trading in the greenback has been "giving some dollar bulls hope for a new breakout to the upside," he said.
In the meantime, "the range of data released by the U.S. across the rest of the week does have the potential to shake up the thin summer market" for gold, said James Moore, an analyst at TheBullionDesk.com in London. Upcoming data include June's durable goods on Wednesday and second-quarter gross domestic product on Friday.
In other metals trading Tuesday, silver for September delivery fell 12.2 cents to close at $7.018 an ounce. September palladium shed $3.90 to end at $190.90 an ounce, while October platinum closed at $885.40 an ounce, down $3.80.
Copper pulls back
And after trading at a record high on Monday, September copper gave up 1.2 cents to close at $1.606 a pound.
Monday's rally reflected in part an ongoing labor strike at Asarco and reports that copper cathode imports into China were at multi-month highs in June, according to William Adams, an analyst at BaseMetals.com.
Copper's likely to continue "to struggle with prices returning toward the lower end of their recent trading bands," he said. This "divergence suggests that the metals are still in consolidation mode and it is unclear whether the downtrends that started in the second quarter were just a result of destocking ahead of the summer slowdown, or whether it was the start of a longer-term trend change," he said.
Tracking inventories, copper supplies were down 335 short tons at 12,172 short tons as of late Monday, according to Nymex. Silver stocks were 374,439 troy ounces at 107.4 million troy ounces, while gold inventories stood at 5.80 million troy ounces, up 42,000 troy ounces from the previous session.
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