A strong durable goods report Wednesday helped reverse a short-lived rebound in precious metals, which had been gaining early in the day on a downgrade of Japan and worries that economic growth in both the U.S. and Europe was tepid at best.
The U.S. Commerce Department reported July durable goods orders at 4 percent, double what many analysts were expecting and the best in four months. The widely followed metric was boosted by orders for aircraft and vehicles. The revised figure for June was down 1.6 percent.
Moody's Investors Services cut Japan's debt rating in a move that left Asian stock markets down early Wednesday. In addition to the one-notch cut in Japan's sovereign debt rating, investors worried that the debt crisis in Europe may worsen because of Germany apparent unwillingness to put up gold as security for bailouts.
That lifted gold and silver in Asian markets by more than 1 percent.
However, the latest durable goods report plus some mix of hope and faith that Friday's speech the head of the U.S. central bank will signal plans to energize the U.S. economy by intervening in the bond market sent precious metals lower Wednesday.
Gold for December delivery on the Comex division of the New York Mercantile Exchange fell 1.2 percent. Silver fell harder, dropping 2.9 percent.