Gold Struggles for Direction

Gold was edging marginally lower Tuesday, but mixed economic data prevented traders from finding sustained direction.

Contracts for February-dated gold contracts were recently slipping 90 cents at $647 an ounce. The bullion exchanged-traded funds streetTracks Gold Shares and iShares Comex Gold Trust(IAU Quote), were also falling, off 0.4% recently.

On the economics front, the Institute for Supply Management says its non-manufacturing index rose to 58.9 in November from 57.1 in the prior period. Forecasts called for a reading of 55.5. A figure of over 50 shows expansion in the non-manufacturing parts of the economy.

"Investors will take this as evidence that there has been no meaningful spillover from the factory sector to the service sector, which will help to sustain the economic expansion," notes Randy Diamond, an analyst at Miller Tabak in New York.

Also out in the morning but showing a different trend, the Commerce Department says October's factory orders fell a more than expected 4.7% compared to a consensus estimate of a 4% decline. The prior period's figure was revised down to show growth of 1.7%, from a 2.1% gain.

Foreign exchange traders reacted by marking down the dollar slightly. It was moving lower against the yen, at 114.825 yen compared to 115.33 yen previously, but unchanged vs. the euro, which was recently trading at $1.3328.