ess Trust of India / Mumbai/London December 6, 2006Gold reversed early gains and dropped nearly $5 at the close on Tuesday after better-than-expected US service sector data countered signs of slower growth and triggered a rebound in the dollar.Silver paused for breath after rallying to a six-month high of nearly $15 on Tuesday. The metal is prone to sharp price fluctuations because of thin liquidity, dealers said.Spot gold rose to a high of $642.90 an ounce in New York on Tuesday, before hitting a low of $637.50 an ounce. Gold has tried to break the stubborn $650 resistance level but it only managed to go as far as $649.50 - a 16-week high hit on Friday.Global oil prices slid today, erasing earlier gains as traders weighed concerns over a further OPEC output cut against forecasts of warmer weather in the United States, a major consumer of heating fuel.Crude futures had tumbled about a dollar yesterday on prospects of higher temperatures in the US, which could reduce demand during the country's winter.New York's main contract, light sweet crude for delivery in January, shed 19 cents to $62.25 per barrel in pit trading.In London, Brent North Sea crude for January delivery lost 17 cents to $63.28 in electronic deals."There was little fresh oil-specific news to explain the price decline, which reflects continued unease over US growth prospects as well as easing over the short-term weather outlook," Kevin Norrish, Barclays Capital analyst, said."The latest US weather outlook sees temperatures warming to above normal this weekend and staying high for up to two weeks thereafter." Earlier today, crude futures had risen, helped by forecasts that US data to be published on Wednesday would show a fall in stocks of US heating fuel, analysts said.Analysts are meanwhile forecasting that stocks of US distillates, which include heating fuel, fell by 9,50,000 barrels last week owing to cold weather in the northeastern United States.The US Department of Energy will publish its figures tomorrow.
