Gold aims to recoup some of the $36 it lost Tuesday in New York By Myra P. Saefong, MarketWatch TOKYO (MarketWatch) — Gold futures climbed on Globex during Asia’s Wednesday afternoon trading, aiming to recoup some of the more than $36-an-ounce drop they suffered in New York after China’s hike in its key interest rate strengthened the U.S. dollar and lured investors away from precious metals. Gold for December delivery (GCZ10 1,338, +2.20, +0.17%) was up $5 at $1,341 an ounce in electronic trading on Globex, after tapping a high of $1,341.90. On Tuesday in New York, the contract sank $36.10 to finish at $1,336, its lowest close since Oct. 7. See Tuesday’s metals column. The drop followed Thursday’s close at a fresh record high of $1,377.60. Markets for commodities such as gold and crude oil don’t have bullish supply and demand factors to support them, “so remain vulnerable to large selloffs,” said Darin Newsom, a senior analyst at Telvent DTN. If dollar continues to rally, short-term gold has some room to go down, with the target area between $1,150 and $1,115, he said. But on Wednesday, the U.S. dollar traded a bit weaker against currency rivals, with the dollar index (DXY 78.04, -0.15, -0.19%) , a measure of the U.S. currency unit against a basket of major global currencies, trading at 78.020, from 78.041 in North American trading late Tuesday. In a Tuesday blog, Peter Grandich, editor of the Grandich Letter warned traders not to underestimate the “internal strength of this once-in-a-lifetime mother-of-all secular bull markets” for gold. “Most of the surprises have been, and should continue to be, to the upside ...,” he said. “Let the correction and consolidation do its thing, but know my target for $1,500-plus in 2011, and $2,000-plus gold remains before this thing is all said and done.” The difference right now is that “we’re in the second half of the game and the metals are no longer cheap,” he said.

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