Dealers noted that gold's softer demeanor was as much due to a lack of buying interest than any sustained or aggressive selling as many holders of metal remain aware of the tense global geopolitical landscape and the bearish outlook for the U.S. dollar while the U.S. economy grapples with burdening levels of debt.
However, the downdraft seen in the oil market as crude prices on Nymex peeled back to the $52.10 a barrel area from early highs around $55.33 greased gold's pole and set Dec prices on a declining path through most of the session.
That downwards momentum gathered steam over the last hour or so of trading as bullion bank selling pressure increased against a backdrop of a climbing U.S. dollar relative to other currencies.
Dealers argued that gold's rather stunted reaction to the U.S. dollar's decline to eight-month lows against the euro earlier in the session had spurred the bank selling seen late on.
