Gold Inches Lower

"These figures aren't as soft as we might like to think," says T. J. Marta, a fixed-income strategist at RBC Capital Markets in New York, noting the deflating, and favorable, impact of car prices on the figures. "The Fed governors being what they are aren't going to drop the inflation-fighting mantle just yet."

A Fed hell-bent on crushing inflation may not be the most positive factor for gold, which tends to run up in price with higher inflation. But other factors, such as the health of the broader U.S. economy, may restrain policy makers from hiking rates too far.

The minor dip in initial claims for unemployment insurance, which the Labor Department says fell to 308,000 in October, however, reflects a relatively healthy economy. The figure was off 2,000 compared to the revised previous month's total and 2,000 below consensus forecasts.

Elsewhere, the U.S. Mint reports it sold 8,000 of its 24 karat (99.99% pure) one-ounce gold bullion buffalo coins, but only 1,000 ounces of its 22 karat (91.7% pure) gold Eagle coins for the first half of November. That compares to sales for the whole of October of 21,500 coins and 9,000 ounces, for the Buffalo and Eagle, respectively.

"A considerable number of secondary market Eagles have been sold into the market during the recent rally," when prices rose from under $580 in mid September, says Bill Haynes, president of CMI Gold & Silver, a Phoenix Ariz.-based coin dealer. "That means there is little reason for dealers to order more from the Mint."

Among the miners, Freeport-McMoRan Copper & Gold(FCX Quote) was losing 2%, and Barrick Gold(ABX Quote) was down 1.9% in recent trading.