Gold in N.Y. Retreats After Gaining the Most in Three Weeks

July 14 (Bloomberg) -- Gold fell in New York on sales by some investors after prices gained the most in three weeks.

The metal yesterday climbed 1.2 percent, the most since mid-June. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, was unchanged yesterday. Gold has increased 11 percent this year.

“Gold is at the top end of its recent trading range and faces technical resistance,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “There is a bit of profit taking.”

Gold futures for August delivery fell $6.50, or 0.5 percent, to $1,207 an ounce on the Comex in New York.

The metal has failed to settle above $1,215 since June 30, an area of resistance, McGhee said. Earlier today, the price touched $1,218.20 before retreating.

A drop below $1,200 is an opportunity to buy, said Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago.

“The $1,200 level seems most favorable for entry,” Pawlicki said. “Low interest rates will continue to suggest that the cost of carry for gold is low, and will allow the metal to compete with Treasuries for investors that need a store of value.”

The Federal Reserve has kept the benchmark U.S. interest rate between zero percent and 0.25 percent since December 2008 to revive the economy.

Gold reached a record $1,266.50 on June 21 and also rallied to all-time highs in euros, U.K. sterling and Swiss francs last month amid Europe’s credit crisis.

Silver futures for September delivery rose 3.3 cents, or 0.2 percent, to $18.29 an ounce on the Comex.

Platinum futures for October delivery declined $14.80, or 1 percent, to $1,520.60 an ounce on the New York Mercantile Exchange.

Palladium futures for September delivery lost $3.35, or 0.7 percent, to $465.80 an ounce, also on Nymex.