Gold pushed steadily higher from the far East through to the New York open on Tuesday, but the $939 peak was the high for the day as it sold off in fits and starts to just after noon, before regaining some lost ground over the final hours to close at $934.80/oz., up $6.80. Overnight, gold has fallen off.
Platinum moved slowly higher, to $1230 just before noon, but got taken down from there to end at $1216/oz., up $11. Overnight, platinum is sharply lower.

Silver had a series of gentle undulations between $14.10 and $14.40 and, though it closed nearer the lower end, was still in positive territory at $14.18/oz., up 16 cents. Overnight, silver is trending lower. (Click here for charts)

With the dollar off a bit and oil slightly lower, one might have expected the precious metals to turn in a blah day, and that’s about what happened. That there was a positive tint to the action was a bonus, considering the beating that the sector has recently taken.

“The U.S. currency continues to dictate direction,” wrote Andrey Kryuchenkov, an analyst at VTB Capital in London. “We expect gold to start consolidating” this week “as the dollar retreats.”

The Hightower Report analyzed the day thusly: “The gold market might have surprised the trade on Tuesday morning as the market was showing some minor strength overnight but as the trade moved toward the US scheduled report slate, prices began to firm. However, the gold market was unable to sustain the early strength through the US Housing Starts and inflation reports. With the gold market showing some downside momentum in the early afternoon trade in sync with the weakness being seen in the US equity markets, some traders are suggesting that the direction of equity prices is becoming more important than the action in the US Dollar. But in the end, the weak Dollar seemed to give the gold bulls a slight edge.”

Looking ahead, Kryuchenkov called it significant that finance ministers from the G-8 have agreed to consider steps to scale back economic stimulus measures once global growth resumes, and have asked the IMF how that might be accomplished without exacerbating the financial crisis.

“Provided this talk from policy makers intensifies towards the end of the year, we might see another strong rally in gold,” Kryuchenkov said. “Your average investor knows that G-8 finance ministers are already pondering rising inflation.”

And Kitco’s Jon Nadler threw a wet blanket on platinum’s recent gains, writing that, “Based on fundamentals, and based on the auto sector’s lack of vital signs, there is little to compel people to run out and buy the noble metals.”

Source: Precious Metals Recover a Bit