US gold settles lower

US gold futures held onto losses triggered by falling oil prices and unloading of weak long positions into on Wednesday's close, traders said. Rising United States interest rates helped fuel gold selling as some participants worry that tighter liquidity could cause investors to unload precious metals holdings.
"Gold was a little under pressure. I think the rising interest rates continued to be a bit of a concern generally that is leaking into precious metals along with a concern about seasonal lack of (physical) demand," said David Meagre, metals analyst at Aaron Trading in Chicago.
Most-active gold futures for August on the Comex division of the New York Mercantile Exchange settled $4.70 lower at $660.00 an ounce, pulling off high at $665.40.
On Tuesday, August gold extended its rally up to a 10-day high at $665.80, which nearly matched the June 8 high of $665.90. Crude oil prices fell 2 percent on Wednesday, as US gasoline stocks rose and crude inventories hit a nine-year high, easing supply concerns in the world's top consumer.
Rising interest rates were also a concern among gold traders as US Treasury debt prices fell on Wednesday. Weakness in European government bonds spilled into the US debt market after European central bankers voiced inflationary concerns.
A lack of physical demand for the yellow metal at the 10-day highs reached on Tuesday and nearly matched again on Wednesday also took the wind out of gold's five-day rally. "The focal point is physical demand or lack thereof. At this time of year, physical buyers tend to put their hands down, allowing for a slide in the gold market that is currently exacerbated by higher interest rates," said Alaron's Meagre.
August gold encountered tough technical resistance around $665, making the metal vulnerable to more selling on Thursday. With gold futures tracing out a consolidate pattern, between $650 and $665 an ounce, however, longer-term traders showed little concern over the losses.
On Wednesday's selling sent the August contract down to $659.60, still higher than on Tuesday is low at $657.10. Traders said levels below $650 were seen as psychological support and an area for physical traders to renew buying.
Comex estimated final gold volume at light 34,545 lots, with options trade pegged at 5,576 lots. On Tuesday's official futures turnover came to 66,210 lots. Spot gold eased to $650.50/7.0 an ounce by late on Monday from $660.70/2.20 on Tuesday's trade. It set a high at $661.35 nearly matching a 10-day high of $661.40 set on Tuesday.
London banks set the afternoon gold fix at $657.40. Comex July silver finished 7.50 cents lower at $13.25 an ounce in a $13.22 to $13.4150 range. Spot silver fell to $13.21/3.25 an ounce in late trade, down from $13.31/35 on Tuesday. London silver was fixed at $13.34 an ounce.
Platinum remained propped up by supply concerns following plans announced on Monday by world's biggest platinum producer Angloplat to suspend production at its biggest mine. The seven-day safety shutdown was seen cutting production by 10,000 to 15,000 ounces, the company said. Nymex July platinum closed up $2.30 at $1,300.80 an ounce. Spot platinum edged up to $1,290/1,294. September palladium added $3.40 to end at $379.90 an ounce. Spot palladium rose to $373.0/377.0.