Gold rose steadily from Hong Kong into the first hour of New York trading on Wednesday, cresting above $900, but that is proving to be a formidable resistance point, and the metal was beaten down until noon, rallied into the COMEX close, but sank again through the Globex, finishing at $881.90, down $10.80. Overnight, gold has been pushing higher.

Platinum made a strong run upward from Hong Kong until just before the New York open, hitting $1240, but then gave it all back and then some, as it declined for the rest of the day to end at $1184/oz., down $18. Overnight, platinum has moved higher.

Like gold, silver peaked early in New York trading, poking its nose above $13.60, but from there its fall was not quite as steep or steady as gold’s and it closed at $13.21/oz., down just 7 cents. Overnight, silver is trending higher. (Click here for charts)

It was another day of consolidation for the precious metals on Wednesday, again not unexpected as the usual suspects lined up against them, with the dollar rising and crude giving up early gains to finish lower.

Not a bad day, really, but one that reinforced the notion that gold will continue to meet resistance at $900 until something happens to propel it higher for good. That something could of course be whatever happens with the Paulson bailout plan.

“Traders are seen as reluctant to take significant positions before the rescue plan takes shape,” said Kitco’s Jon Nadler. Thus, “Volatility will remain visible so long as the package faces legislative headwinds and uncertainty continues in other markets.”

However, Nadler added, “Gold will continue to benefit from the funding squeeze that continues to chill markets.”

Also factoring in could be that gold may stay rangebound until after the October-futures contract expires at the close of trading today, according to UBS AG analyst John Reade, who says the contract “has a lot of open interest between $890 and $910, and we believe it is no coincidence that gold is struggling to get far from here at the moment.”

In any case, physical buying by the ETFs continues apace. The SPDR Gold Trust (GLD), the biggest exchange-traded fund backed by bullion, has increased 6.7% already this week, after climbing 11% last week to a record 724.9 metric tons. The fund is the eighth-largest holder of bullion in the world.

That may be just the beginning, as we prepare to enter the year’s fourth quarter, traditionally the peak season for gold buying.

Source: Precious metals adrift -  Gold rebuffed at $900 once again

Last 5 posts by Doug Casey

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• Gold Pushes Through $950 - July 27th, 2009