Gold Bucks Up

Meanwhile chart watchers spy a particularly bullish confluence of events for the yellow metal.

"Gold prices crossed the exponential 200-day moving average and also broke the downward trend line resistance at about $601 for the first time since it was established in May," says Marc Eckelberry, a Los Angeles-based futures trader and author of the AheadOfTheNews.com markets blog. As gold moved higher later in the session, an inverted head-and-shoulders formation was confirmed as the neckline was pierced at around $606, he adds.

Elsewhere in gold, a bearish report by London-based specialty consulting firm Virtual Metals, which forecasts a huge oversupply of bullion in 2007, seemed to be quickly shrugged off by market participants.

Among the miners, Gold Fields got dinged twice -- getting downgrades from both BMO Capital Markets and CIBC World Markets. The former downed the stock rating to market perform from outperform, while the latter cut it to sector underperform from sector perform. Investors took note, and the stock was recently down 1.5%.

"Cost control is still the biggest threat to the fortunes of gold-mining companies," notes a weekly memo from U.S. Global Investors. "Rising costs are affecting miners worldwide, in large part from the steep price for qualified labor."

In base metals, Comex copper contracts slid back 4.65 cents to close at $3.3585 a pound, likely on concern that demand will slacken as the U.S. housing sector continues to cool.