Gold for December delivery settled $10.80 lower at $1,399.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,410 and as low as $1,383.40 on Wednesday.
The U.S. dollar index was adding 0.38% to $77.74 while the euro was losing 0.08% to $1.37 vs. the dollar. The spot gold price was adding more than $4, according to Kitco's gold index.
Gold prices struggled across the board on Wednesday. Tentative bargain hunting for the physical metal held up the spot price, while the futures market endured a deeper sell-off. Technical selling and a stronger U.S. dollar eventually won out to drag all metal contracts lower.Silver prices lost $2.04 to $26.86 after the Chicago Mercantile Exchange raised the amount of money investors need as a deposit before they can buy silver contracts to $6,500 from $5,000. The increase spooked investors, which filtered into the gold market as well. George Gero, vice president at RBC Capital Markets, said that "yesterday's volatility continues as the higher the price, the higher the volatility in futures." Technical selling combined with stop-loss orders, where traders are forced to sell after gold breaks through a certain level, are "finding few buyers for now." Traders are in the process of deciding if they want to let their gold December option contracts expire on the first of the month or else put up new capital to roll them over to February 2011. Gero expects the massive selling to be done by tomorrow. Gold prices were up roughly 27% for 2010 after hitting a record intraday high of $1,424 an ounce on Tuesday. Traders usually use that kind of surge as an opportunity to take profits. "No market goes straight up or straight down" said Greg Marshall, CEO of Global Asset Management. "