Gold dulls as dollar turns mixed, oil backs off high

SAN FRANCISCO (MarketWatch) -- Gold futures closed slightly lower Tuesday to tally a three-session loss of more than $2 an ounce as the U.S. dollar traded on a mixed note and crude price backed off a high of more than $75 a barrel.
"Minor price fatigue was visible in the market as bullion prices turned under the critical $665 mark on Tuesday," said Jon Nadler, analyst at Kitco Bullion Dealers.
Gold for August delivery fell 40 cents to close at $665.90 an ounce on the New York Mercantile Exchange. It spent much of the session trading higher.

— Peter Grandich, the Grandich letter
"Despite an onslaught of increased bearishness and some highly suspect capping trading patterns on the Comex, gold has managed to more than hold its own during its weakest seasonally favorable period," said Peter Grandich, editor of the Grandich Letter, in e-mailed comments.
"The big surprise in coming days could be a major break above key resistance in the $670 to $675 area," Grandich said.
On the currency markets, the British pound rallied to a new 26-year peak against the dollar. The greenback edged higher against the yen, but remained lower against major European currencies.
"The divergence between gold and the valuation of the dollar is reaching an extreme level that cannot be sustained," said Ned Schmidt, editor of the Value View Gold Report. "What that means is that the value of major currencies has appreciated, sending the dollar to a new low."
But "gold, which is really just a money, has not reflected that valuation," he said in e-mailed comments. He said a "major upward revaluation of gold is extremely likely."
Aside from the dollar, "the near-record oil prices and the increasing inflationary pressures which they are creating internationally," are just as important Mark O'Byrne, director at Gold & Silver Investments Ltd. said in a note to clients.