Gold had itself a real seesaw day yesterday, poking about $15 higher by the time New York opened, really taking off and rising as high as $768 in the first hour, but then encountering a steep falloff that dropped it nearly to $740 by noon, after which it edged higher again and leveled off to finish at $744.70, up $10.80 from Friday. Overnight, gold has slipped lower.

Platinum peaked at $880, also in the first hour of the Comex, then sold off through the rest of the session before taking back a bit of ground in the Globex to end at $853/oz., up $9. Overnight, platinum is sharply lower.

Silver followed the same track as its sister metals, reaching past $10.50 on the upside, but retreated substantially to close at $10.14/oz., up only 7 cents. Overnight, silver has fallen off. (Click here for charts)

Monday was a disappointing day for the precious metals, as they all dumped most of their gains even as the dollar was slipping against the euro and crude was staging a comeback.

It didn’t help that the buck came well off its session lows as the day progressed, but the tale of two trades centered on the announcement out of China that it is preparing a more than half-trillion dollar stimulus package for its economy.

That sparked some buying of the precious metals at first, as traders reacted to the move’s potential for stoking inflation, but the effect apparently wore off pretty quickly, and down came prices. Encouraging, though, were the late day rallies.

Kitco’s Jon Nadler, mused that, “Speculators hope that the injection of such large sums into the Chinese economy might keep those sectors of demand, which have proven beneficial to commodities in the past, going for a while longer.”

But, Nadler added, “The reality is that trillions of yuan involved will not be spent next week and start a new supercycle in commodities … The stimulus spending will extend well into the next decade, while current global conditions are anything but stimulating.”

However, Mark O’Byrne, a director at Gold & Silver Investments Ltd., unabashedly bullish. “The worst of the sell-off appears [to be] behind us as,” he declared, “even after the recent gains, we remain oversold and any further falls are likely to be short and shallow … Gold will likely surprise many by recovering its recent sharp losses as quickly as they were incurred, and we could see gold above $800 again well before the end of November.”

Source: Gold yields much of early gain, but finishes higher -  Silver, platinum also modestly higher