US MIDDAY: gold falls

Gold fell for a third straight session on Tuesday as a strong dollar and weak US retail and corporate earnings triggered fund liquidation amid a broad sell-off in commodities. Investors questioned the metal's ability to extend its decade-long rally after filings showed billionaire financier George Soros dumped almost his entire $800 million stake in bullion in the first quarter.
Technical selling dragged gold prices after the metal breached major trend line support, and looked set to test below a 50-day average which it had held for the past two months.
"Dollar strength and commodities decline are symptoms of what's going on with the global industrial cycle, and those are compounded by deleveraging," said James Dailey, a portfolio manager with TEAM Asset Strategy Fund which has $54 million fund assets. Spot gold fell 0.5 percent to $1,481.90 an ounce by 12:44 pm EDT (1644 GMT). US gold futures for June delivery fell $8.50 to $1,482.10 an ounce.
Silver gained 0.5 percent to $33.74 an ounce.
Higher costs for gasoline, food and clothes are crimping the fledgling US economic recovery, earnings from bellwether retailers Wal-Mart Stores Inc and Home Depot Inc showed on Tuesday. Disappointing results from Hewlett-Packard Co also weighed. Spot gold could face further technical headwinds after bullion breached a rising trend line dating back to late January, a key support bullion had held for nearly four months, said TEAM's Dailey.
The metal is now $100 below its record highs above $1,575 an ounce set earlier this month. Billionaire financier George Soros, who called gold "the ultimate bubble," dumped almost his entire $800 million stake in bullion in the first quarter, well before a commodities slump blamed partly on reports he was liquidating his holdings.
Gold holdings in exchange-traded funds monitored by Reuters fell for a 10th consecutive trading day Monday, bringing the net decline for the period to more than 1.14 million ounces. They are down 1.62 percent year to date. In the last month in gold, the only outflows had come from the largest fund, SPDR Gold Trust, which reported a 1.25-million-ounce outflow from mid-April to May 16. Among platinum group metals, platinum rose 0.3 percent to $1,755.75 an ounce, while palladium was up 0.7 percent at $714.72.