NY gold heads down in morning, watches dollar,data


NEW YORK, Sept 27 (Reuters) - NY gold slumped early Tuesday in confused trade, with worse-than-expected U.S. economic data at midmorning lifting the dollar and cutting short an attempt at rallying the precious metal.

"It suddenly turned around and fell $3. As for the ever-strengthening dollar, it's pretty confusing to me," said one gold trader at a commercial bank.

A firmer dollar and weaker oil prices made it hard for gold to hold gains like the rally on Monday. Still, many players remain bullish from gold's advance to 18-year highs last week, with hedge funds sniffing around and buying on dips.

December gold at the COMEX division of the New York Mercantile Exchange was down $3.70 at $465.80 an ounce, at 10:26 a.m. EDT (1426 GMT).

It took out the previous morning low, hitting $464.80 after the Conference Board said its September U.S. consumer confidence index fell to 86.6 from August's 105.50 and the Commerce Department reported a sharper than expected 9.9 percent fall in U.S. single family home sales in August.

"If the numbers don't do too much to curb the dollar's latent enthusiasm, then I think we're looking to consolidate a little bit with gold, and silver to follow," said James Quinn, commodities commentator at A.G. Edwards.

The dollar's rally pushed the euro briefly below $1.20, which held when the euro weakened on Monday, providing an excuse for traders to buy gold.

Meanwhile, oil prices were weaker Tuesday morning, as investors weighed the impact on oil production in the Gulf of Mexico from Hurricane Rita, which did less damage to rigs and refineries this weekend than many had feared.

Spot gold was quoted at $461.40/2.10, off from $466.30/7.00 late Monday. Tuesday's afternoon fix in London was $464.10.

COMEX December silver was down 6.5 cents at $7.30 an ounce, after dealing from $7.40 to $7.285.

Spot silver was quoted at $7.23/26, down from $7.33/36 an ounce. It fixed Tuesday at $7.295.

NYMEX October platinum was up 50 cents at $918 an ounce. Spot platinum fetched $913/917.

December palladium was $1.65 higher at $199.40 an ounce. Spot palladium was indicated at $192/196.



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