US MIDDAY: gold edges down

US gold futures edged lower in pre-holiday trade early Tuesday following Monday's rally, but traders said prices should move higher in the near term as decent buying by funds and trades was seen.
At 9:35 am EDT (1335 GMT), most-active gold for August delivery on the COMEX division of the New York Mercantile Exchange was down 90 cents at $658.30 an ounce, dealing in a tight range between $657.80 and $660.30. Jonathan Jossen, an independent trader in New York, said from the COMEX floor that fund and trade-buying with good volume was evident in the pit.
He said institutional buyers should boost gold in the beginning of the third quarter because of the precious metal's lacklustre gains in the first half of this year. "If gold is still in favour, the funds will come back in the first few days of the quarter," Jossen said. He said, technically, August futures could test $663 or even $671 this week.
Light profit-taking and position-squaring ahead of the US Independence Day holiday on Wednesday occurred. On Monday, futures rallied nearly $10 to end at $659.20 which marked their loftiest level in almost two weeks.
The dollar tumbled to a 26-year low against sterling. It gained some ground against the euro but still hovered close to record troughs after falling to within half a cent of a record low against the common currency on Monday. A weak greenback makes gold, which is denominated in US dollar, cheaper for holders of foreign currencies.
Jon Nadler, analyst at Kitco Bullion Dealers, said in a note to clients that gold was supported by safe-haven buying on security concerns because of the recent attacks in London and Glasgow.
Nadler said that, however, investors remained on alert for any signs of fatigue in the recent rise in prices. In mining news, the three largest gold firms in South Africa, the world's biggest producer of the precious metal, offered workers a 6 percent wage hike on Monday.
Spot gold dipped to $655.65/$656.25 from $656.70/$658.20 late Monday. The London morning gold fix was set at $657.25. COMEX September silver was down 13 cents at $12.610 an ounce, dealing between $12.600 and $12.785. Spot silver was quoted at $12.52/12.56 which was off the late Monday quote of $12.63/12.68. London silver was fixed at $12.600.
NYMEX October platinum was down $2.90 at $1,292.20 an ounce. Spot platinum traded at $1,280/1,284. September palladium fell $2.40 to $369.00 an ounce. Spot palladium fetched $366/370.