Gold futures near flat as traders eye the dollar - A last piece of News re Gold

BY

Gold futures traded little changed Wednesday, well below the session's high of nearly $640 an ounce with traders eyeing moves in the U.S. dollar following a drop in existing-home sales.

Adding pressure to metals prices, oil futures dropped on the heels of a climb in last week's gasoline inventories.

Although traders are have gotten their new home sales data (which is showing marked levels of weakness), they are focusing on the U.S. dollar's next possible move and thus the gold market appears to be extremely cautious in taking on fresh long positions at this juncture investment products

For the moment, the confirmation of a cooling economy has not proven to be the catalyst for a gold rally.

Gold for December delivery was last down 40 cents at $633.40 an ounce on the New York Mercantile Exchange after trading as high as $639.80, its highest intraday level since Aug. 17.

The contract closed more than $1 lower Tuesday but held above the $630 level after Iran made its formal response to a package of incentives from western governments aimed at persuading it to cease uranium enrichment.

Sales of existing homes plunged 4.1% to a seasonally adjusted annualized rate of 6.33 million, the lowest since January 2004.

The news initially helped the dollar extend its decline, then the dollar nearly flatted against major currencies since the housing data had been widely expected.

The Tehran government on Tuesday did not disclose details of its 21-page response but the country's top nuclear negotiator said Iran is willing to enter 'serious negotiations' on the issue. Iranian officials have repeatedly said it will not be deterred from pursuing its nuclear program, insisting it is aimed at power generation for civilian purposes and not at producing nuclear weapons.

Other metals traded on a mixed note Wednesday. September silver added 22.5 cents to $12.49 an ounce after a high of $12.68, a level it hasn't seen since late May. October platinum fell $1.80 to $1,236 an ounce and September palladium rose $1.55 to $344.50 an ounce. September copper futures fell 0.3 cent to $3.49 a pound.

On the supply side, gold inventories were down by 20,535 troy ounces at 8.14 million as of late Tuesday, according to Nymex data.

Silver supplies fell by 4,918 troy ounces to 103.5 million and copper inventories were unchanged at 8,693 short tons.

Also Wednesday, indexes that track metals and mining stocks posted modest gains.