Updated from 11:43 a.m. EDT

Concerns over North Korea's missile program returned to the gold market Wednesday afternoon as news reached traders of a seventh weapon launch by the rogue state. In Nymex trading, the yellow metal closed at just under $630 per ounce, up from $613 on Friday and marginally below its high of $632.50 per troy ounce reached Tuesday night in Asia. (Nymex trading was closed Monday and Tuesday in holiday observance.)

The dollar was still showing strength vs. the euro, which was recently trading at $1.2726 vs. $1.28 Tuesday, as investors poured into the greenback thanks to the prospect of higher interest rates. Stronger-than-expected U.S. factory orders data and a forecast by ADP of a much stronger-than-expected June payroll report helped revive the notion of more Federal Reserve rate hikes.

The gold exchange-traded funds (ETFs) iShares COMEX Gold Trust ( IAU) and streetTRACKS Gold Shares ( GLD) reversed early losses and were trading slightly up in the late afternoon.

Meanwhile, shares of Newmont Mining ( NEM), Freeport McMoran Copper and Gold ( FCX) and Barrick Gold ( ABX) were erasing most, but not all, of their losses from earlier Wednesday.

Also in precious metals, shares of the iShares Silver Trust ( SLV) were trading up in the afternoon session, reflecting investor concern over Korea, and there was a jump in the benchmark September Comex silver futures price to $11.415 per ounce, up almost 50 cents as investors looked for a safe haven.

Happy to Buy Gold

Looking back slightly further, gold has now retraced part of the losses following its fall from $730 an ounce reached in May. Despite the undeniable volatility and the fact that the metal remains $100 under the May high, the small investor does not seem to have fled, at least when coins are concerned. Data from the U.S. Mint show that sales of its popular 22 karat (91.7% pure) American Eagle coins hit 113,000 ounces in June. That's up from 36,500 in May and a mere 20,000 in June 2005, when prices were trading nearer to $400 an ounce.

The data also come on top of solid investor buying of the Mint's new (99.99% pure) one-ounce American Buffalo coin, which only went on sale June 20. Through July 3, 104,500 coins were sold.

The Mint's statistics, however, may actually understate current small-investor interest in gold. That's because not only are dealers seeing good sales to those new to the gold market, they are also seeing profit-taking by some longtime holders of physical metal, says Michael Kramer, president of MTB, a precious-metal bullion specialist.

Such profit-taking means that Kramer can cut out going to the Mint so often for more coins because he can simply resell those bought from other customers. It's cheaper that way, he says, because he pays retail investors less for their sales than he pays the Mint.

Business is double its normal level, he claims, and that's particularly interesting given that the summer months of June, July and August are typically slower.

Others in the business note the peculiarities of the small investor venturing into the gold coin market. "It's somewhat ironic that they wouldn't buy at $300 an ounce but are quite happy to do it at $600,'" says Jonathon Potts, managing director of FideliTrade, another specialty precious metals coin and bar dealer.

In the base metals market, Canadian miner Inco ( N) reports that nickel production will be over 3,000 tons lower than expected in 2006 because of outages in May.

In Wednesday's London Metal Exchange's afternoon session, perilously low stocks of nickel sent prices for the metal to $22,805 per metric ton vs. $22,100 the previous day. The spot prices reached $24,000. Nickel stocks listed in LME warehouses are now at 9,400 tons vs. 12,588 tons as recently as June 23.

Shares of Inco, however, were falling 2% by mid-afternoon, and shares of the other Canadian nickel miner, Falconbridge ( FAL), were also off 2%, both down slightly more than the broader market but up from earlier in the day.

The positive effects of a strong metal price on Inco and Falconbridge will likely continue to be overshadowed by the merger activity that is dominating Canada's nickel patch. Last week, Phelps Dodge ( PD) offered to purchase both Inco and Falconbridge for $40 billion.

The benchmark September Comex copper contract was trading up 4.9 cents at $3.40 per pound by the time the floor session ended. Shares of Phelps Dodge were trading down almost 3%, reflecting concern over its proposed purchase on Inco and Falconbridge as well as a possible future rate hikes.