Precious metals futures prices fell sharply Tuesday, giving back most of the previous day’s gains after gold ran into resistance at $410 an ounce.
On other markets, cocoa futures plummeted, grains and soybeans advanced, livestock and meat futures were mixed, energy futures were mixed and stock index futures retreated.
Gold may be headed below $400 an ounce, the key psychological barrier it struggled past last week, analysts said.
After climbing $5.40 to $408.60 an ounce Monday on New York’s Commodity Exchange, spot gold prices peaked at $410 Monday night on overseas markets, then began to retreat.
Gold for October delivery on the Comex settled at $404.40 an ounce, down $4.20 from Monday’s final price.
“The markets basically got up to their first main resistance area, then started picking up selling, which seemed to accelerate throughout the day,” said David Syphen, manager of metals futures trading for Merrill Lynch Capital Markets in New York.
“This is an indication that the gold market is still fundamentally on the defensive and may retest the previous lows below $395,” he said.
Spot gold fell to $392 an ounce on the Comex late last month, reflecting slack investment demand and low inflation.
Analyst Bette Raptopoulos of Prudential-Bache Securities Inc. in New York said rising crude oil prices and a softer dollar early in the session held some promise of supporting gold prices. But those markets reversed direction later in the day.
On the Comex, gold settled $4.20 to $4.30 lower, with the contract for delivery in December at $408.40 an ounce; silver was 14.2 cents to 14.7 cents lower, with December at $6.275 an ounce.
Cocoa Futures Dive
On the New York Mercantile Exchange, platinum settled $7.30 to $8.10 lower, with October at $513.10 an ounce.
Cocoa futures prices plummeted on New York’s Coffee, Sugar & Cocoa Exchange, ending a seven-day rally that had pushed the December contract up $174 a metric ton.
Cocoa futures are at 13-year lows due to a glut of cocoa and the inability of producer and consumer nations to agree on a price-support program.
Cocoa settled $51 to $74 lower, with December at $1,216 a metric ton.
Grain and soybean futures finished mostly higher on the Chicago Board of Trade in response to a surge in foreign demand, analysts said.
Meat Prices Mixed
Cattle futures posted modest losses on the Chicago Mercantile Exchange on technical factors while pork futures were narrowly mixed on a combination of steady cash hog prices and light retail demand, analysts said.
Live cattle settled unchanged to 0.45 cent lower, with October at 72.35 cents a pound; feeder cattle were unchanged to 0.48 cent lower, with October at 81.55 cents a pound; hogs were 0.22 cent lower to 0.05 cent higher, with October at 40.20 cents a pound, and frozen pork bellies were 0.18 cent to 0.43 cent higher, with February at 48 cents a pound.