* Gold, silver hit lowest since Oct. 6 as dollar recovers
* Dollar bounces back after U.S. consumer confidence data
* Indian buyers hunt bargains; U.S. gold ETF sees outflows
(Recasts, updates closing prices, market activity, adds NEW
YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Oct 27 (Reuters) - Gold futures settled
lower on Tuesday after hitting three-week lows during a session
that saw the dollar rise on weak U.S. consumer confidence
data.
A resurgent dollar prompted gold investors to take profits
in gold, which has rallied in the past two months.
Gold could test lower at $1,000 an ounce without support
from the stock market, said Adam Klopfenstein, senior market
strategist at MF Global's Lind-Waldock division in Chicago.
"So goes the equities market, so goes the rest of the
commodities spectrum," Klopfenstein said. "I think that
relationship is going to stay in play for the foreseeable
future, with an indirect relationship to the dollar."
U.S. December gold futures <GCZ9> settled down $7.40 at
$1,035.40 an ounce on the COMEX division of NYMEX.
Spot gold <XAU=> was at $1,038.70 an ounce at 2:55 p.m. EDT
(1855 GMT), up slightly from $1,037.10 late in New York on
Monday.
Gold bounced off session lows after finding resistance just
above $1,030 an ounce, the long-standing record high it passed
on Oct. 6.
Afshin Nabavi, head of trading at MKS Finance in Geneva,
said prices should stay in a $1,030-$1,070 range. He said gold
moved lower due to the euro's weakness versus the dollar.
"I would say we are getting close to the bottom for gold,"
he said. "This is the correction we were looking for."
The dollar rose to a two-week high against the euro after
data showed U.S. consumer confidence waned in October. []
The dollar has weakened in recent months as encouraging
economic data has whetted investors' appetite for other
currencies and riskier investments such as commodities. But any
weak U.S. data has boosted the dollar as risk appetite wanes.
BARGAINS SOUGHT
Oil rose back above $79 a barrel after three straight days
of declines, as investors awaited direction from equities and
U.S. oil inventory data. []
In the physical gold market, a dip in prices has sparked
some bargain hunting in major gold consumer India, though the
weak rupee weighed on prices. Jewelry buying has been weak this
year as high prices deterred investors.
In New York, the world's biggest gold-backed
exchange-traded fund, the SPDR Gold Trust <GLD>, said it saw an
outflow of 1.22 tonnes on Monday. Investment demand for
products like ETFs has been a major support to prices this
year. []
Among other precious metals, spot silver <XAG=> was at
$16.61 an ounce, down from $17.05 late on Monday. During the
session, silver tracked gold down to a three-week low of
$16.47.
Platinum <XPT=> also touched a three-week low of $1,305.50
an ounce, and was later at $1,315.50 an ounce against
$1,330.50. Palladium <XPD=> was at $325.50 against $329.50.
Close Change Pct 2008 YTD
Chg Close % Chg
US gold <GCZ9> 1035.40 -7.4 -0.7 884.3 17.1
US silver <SIZ9> 16.540 -0.555 -3.2 11.295 46.4
US platinum <PLF0> 1319.00 -26.80 -2.0 941.50 40.1
US palladium <PAZ9> 330.55 -2.70 -0.8 188.70 75.2
Prices at 2:50 p.m. EDT (1850 GMT)
Gold <XAU=> 1038.30 1.20 0.1 878.20 18.2
Silver <XAG=> 16.60 -0.45 -2.6 11.30 46.9
Platinum <XPT=> 1315.50 -15.00 -1.1 924.50 42.3
Palladium <XPD=> 325.50 -4.000 -1.2 184.50 76.4
Gold Fix <XAUFIX=> 1036.50 -4.25 -0.4 836.50 23.9
Silver Fix <XAGFIX=> 17.06 -55.00 -3.1 14.76 15.6
Platinum Fix <XPTFIX=> 1323.00 5.00 0.4 1529 -13.5
Palladium Fix<XPDFIX=> 328.00 2.00 0.6 365.0 -10.1
(Editing by David Gregorio)
