Ignoring the continuing exodus of refugees and escalating conflict in Lebanon, jaded precious-metals investors stood aside Friday as gold prices melted away for a second straight day.

Gold for August delivery gave up $12.30 to close at $620.70 an ounce in anemic trading of 8,422 contracts on the Comex division of the New York Mercantile Exchange (Nymex). That was on top of Thursday's $10 loss, as buyers stayed home, worn out from the increased volatility of the past few weeks.

Following the metal's path, the bullion exchange traded funds (ETFs) iShares Comex Gold Trust ( IAU) and streetTRACKS Gold Shares ( GLD) were trading down about 1.4% apiece in recent trading.

"A $20 price move in a single day is no longer uncommon," says Bernard Hunter, a director at ScotiaMocatta, the precious-metals trading arm of the Toronto-based Bank of Nova Scotia. "The volatility has scared the traditional buyers of physical gold, such as jewelry makers, away from the market." A large portion of jewelry sales are typically sold as a form of investment, and the wild gyrations in the price level has been off-putting to some, Hunter notes.

He also adds that the interest in precious metals from hedge funds is creating an imbalance in the market, because when compared with the markets for other investment products, the gold market is relatively small. The GFMS survey gives an estimate of total annual gold supply of about 4,000 metric tons -- this has a value of only $80 billion, even at today's elevated prices. Because of their size, hedge funds can easily buffet the price of metals, thus spooking buyers who are not yet used to the relatively high volatility.

As the price edged towards $620 in morning trading, Hunter says he saw clients looking for physical gold for fabrication enter the market. He expects that sort of "scale-down" buying to intensify as the price dips towards the psychologically important $600 level.

A daily market report from Standard Bank advises its readers that it sees gold entering a "consolidation phase" with trading likely in the $620 to $650 range.

The continued evidence of a slowing U.S. economy is also weighing somewhat on the other metals. Today's Weekly Leading Indicators index from the New York-based Economic Cycle Research Institute showed a 0.3% increase, which was marginally above last week's rise of 0.2%. But it was still well below the levels of the past few months, indicating that the economy can expect to slowdown later this year.

Comex September silver contracts edged 22 cents lower to end the session at $10.85 an ounce, while September copper futures shed 8.65 cents to $3.30 a pound. As recently as July 21, copper futures still commanded as much as $3.59 a pound on the London Metal Exchange, but the likelihood that a strike will be averted at Chile's massive Escondida copper mine has helped ease market anxiety.

"Near-term supply looks less at risk," states a research note from the Commonwealth Bank of Australia Friday morning. "Weaker economic news from the U.S. played a big part" also.

Shares of gold miners Barrick Gold ( ABX), Newmont Mining ( NEM) and Freeport-McMoRan Copper & Gold ( FCX) were all trading down recently, as were those of copper miner Phelps Dodge ( PD).