Gold Unable to Hold Gains

Adding to the day's up-and-down activity were momentum investors chasing the trend.

Short-term traders were buying into strength, explains David Jones, chief market analyst at CMC Markets in London. But he noted that they would have placed stop-loss orders just below the market price to act as an insurance against sudden moves.

Consequently, once it became apparent that the rally wouldn't sustain itself, the strength quickly unwound as stops were triggered at successively lower levels.

Jones foresees meaningful resistance at around the $670 level for spot trades. That level is roughly equivalent to an April futures price of $680.

Meanwhile, in the gold patch, stocks followed the swings in the metal prices. The Amex Gold Bugs Index was down 1.6%. Component company Goldcorp(GG Quote) was lower by 1.8%.

Also sliding were shares of Meridian Gold(MDG Quote), falling 2.5% in recent action.

Turning to base metals, benchmark Comex copper contracts added 5 cents at $2.65 a pound. Shares of Southern Copper(PCU Quote) were rising 0.4%, helped by the advancing metal price.

As for ferrous metals, UBS upped its stock price target on Steel Dynamics(STLD Quote) to $40 a share from $37. The stock was recently rallying 4.1% at around $37.