Gold futures finished the day lower, falling under pressure as the dollar regained some foothold against its foreign counterparts. December-dated gold slipped 60 cents to finish the day at $735.70 an ounce. James Moore, analyst at TheBullionDesk.com told MarketWatch that the short-term direction for gold is likely to depend heavily on the dollar, with the yellow metal still looking quite vulnerable to further profit-taking. In a research note, Moore stated, the longer-term outlook for gold is still extremely positive, though, and the market will continue to benefit from investor inflows as investors factor some form of safe-haven protection into their portfolios. While gold dropped some $17.80 an ounce on Tuesday, some are calling it a mere correction. Moore notes that the correction pulled gold out of overbought territory on the charts.
Turning an eye to the dollar, the currency extended gains against the Japanese yen, the British pound, and the euro. The dollar drew strength from data showing modest expansion on the nonmanufacturing side of the U.S. economy during September. The Institute for Supply Management's nonmanfacturing index expanded at its slowest pace since March, dropping to a reading of 54.8% from 55.8% in August.