After trading sideways throughout the Asia session and coming under pressure in London as trading activity resumed after Monday's Bank holiday, precious metals gained support in New York - aided by the rally in crude oil prices. The US dollar kept investment sentiment subdued for most of the day, as it strengthened to $1.4571 against the euro, after starting the day at $1.4754 in Asia. However, with technical signals calling for a correction to the downside and credit spreads trending sideways, the greenback gave up some of its gains - slipping to $1.4684 against the euro during the New York session. US economic data releases also gave mixed signals for the greenback: consumer confidence climbed 9.63% m/m in Aug, new home sales for July slipped 2.83% m/m, and the Richmond Fed manufacturing index remained unchanged on a m/m basis (and still in negative territory).

The greenback's downside correction in NY fuelled crude oil prices. Coupled with supply disruption fears from tropical storm Gustav, WTI crude prices rallied from $112/bbl to $117/bbl - attracting investment fund flows into precious metals as the oil price pendulum swung  in a volatile range because of global inflation risks.

Although oil prices should remain supported by concerns over storm Gustav today, the greenback's movement against the euro could take centre stage and set the tone for the commodity complex. There was a myriad of weak German data yesterday - the GFK consumer confidence index surprised on the downside, whilst the IFO business climate index slipped 2.7% m/m. Precious metal prices could come under pressure today as investors watch for a correction to the upside for the greenback against the euro.

Gold opened at $821 in Asia and drifted sideways into London trading. The metal then came under pressure, slipping to $807 before swinging to $827 at the PM fix. The metal was volatile in New York, bouncing between $810 and $830 before settling at $822.70 - with investors glued to oil price movements. Primary support for gold is at $813, with $805 - $800 providing secondary support. Primary resistance is at $835 - $843, and secondary resistance at $850.