Gold Dips as Dollar Bucks Up

The greenback rebounds, weighing on the metals complex. Bulls see support at $620.
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Gold was slipping Monday as the dollar rebounded from its recent thrashing.

Prices for December-delivery gold contracts were recently moving lower by $3.90 at $626.20 an ounce on the Nymex, and the bullion exchange-tradedfunds followed the futures down, with shares of

streetTracks Gold Shares

(GLD) - Get Report

and

iShares Comex Gold Trust

(IAU) - Get Report

both dipping about 0.6% recently.

In the currency markets, the dollar was recently buying 118.13 yen, up from 117.59 yen, late Friday. It was also trading up against the euro, which was recently at $1.2811 up from $1.2847.

From a technical analysis viewpoint, scale-down buying should provide support for gold down to about $620 an ounce, according to a brief from bullion bank ScotiaMocatta in Toronto. "The metal's prospects for future strength will be enhanced by a period of consolidation," the report notes.

The falling metal price was dragging down the mining complex with the

Market Vectors Gold Miner ETF

(GDX) - Get Report

falling about 2% recently.

Shares of

Iamgold

(IAG) - Get Report

and

Freeport-McMoRan Copper & Gold

(FCX) - Get Report

were moving lower, off 5.7% and 2.7% respectively.

In base metals, Comex copper contracts were recently up 3.10 cents at $3.1195 a pound, bouncing slightly following

Friday's rout.

"Inventories trending higher would be just fine were prices falling to a level that would discourage supply," writes Tobin Gorey, in a research note from the Commonwealth Bank of Australia. The problem, he says, is that isn't happening because "new capacity, even with the greatly inflated

production costs of the past few years, still costs much less than current prices."

Elsewhere, diversified miner

BHP

(BHP) - Get Report

announced it produced 249,900 tons of copper during the third quarter, a drop of 20% from the prior three months, and off 19% from the third quarter last year.

Production of aluminum at the company held up at 337,000 tons for the last quarter, down only 2% from the three months ending June, but up 1% from the same third quarter a year before.

BHP's shares were falling 4% recently on separate news that the company was purchasing a share in the Genghis Khan oil-and-gas development.

Also falling were shares of

Rio Tinto

(RTP)

, off 4%; and

Companhia Vale do Rio Doce

(RIO) - Get Report

, down 3.2%, lately.