NEW YORK, May 24 (Reuters) - Precious metals gave back nearly all of the steep gains won in the previous session on Wednesday as speculators followed the sharp drop in London, a decline in oil prices and profit-taking across commodity markets, traders said.
But dollar weakness, reports of a possible human-to-human bird flu transmission in Indonesia and a meeting of world leaders to discuss Iran's nuclear program provided an underpinning, albeit at sharply lower levels.
Gold for June delivery was down $29.9 at $643.80 an ounce, or 4.44 percent. The low was $642.50. COMEX gold rose to $732 an ounce 12 days ago, its highest since 1980.
Spot gold fell to $643.20/4.00, down from $672.10/2.90 an ounce at Tuesday's New York close. The afternoon bullion fix in London on Tuesday was $648.50.
COMEX July silver slid as much as 75 cents at $12.42 an ounce, but steadied around $12.61 an ounce, down 56 cents or 4.25 percent. It hit a 25-year high of $15.20 on May 11.
Spot silver tumbled to $12.63/12.73 an ounce, down from $13.17/27 late Tuesday. Silver was fixed at $12.80.
"I think we have to expect the market is going to be more rangebound. People are so used to the (gold) market running up $100 and just going one way and I don't think that's going to happen for awhile. It's going to be in a wide range and we'll still see some volatility," said one New York gold dealer.
Silver was the biggest loser and selling accelerated after news that new orders for U.S.-made durable goods, those meant to last at least three years, tumbled by an unexpectedly large 4.8 percent in April. Orders fell at their fastest pace since January on big declines in civilian aircraft and computer and electronic products orders.
Analysts said the steep drop in orders across many categories lessened the probability the Federal Reserve would raise interest rates at their June meeting.
The dollar fell soon after the durables numbers were released, but later ticked higher against major currencies when stronger-than-expected U.S. new home sales data came out, pushing metals lower.
Elsewhere in silver news, research firm GFMS Ltd compiled the 2006 annual report for the Silver Institute which showed demand for silver rose 3 percent to 864.4 million ounces in 2005, and net investment increased by 23 percent to 47.5 million ounces last year.
"I'm still thinking there's a possibility that we could see a higher high in silver this year; that's very much predicated on gold," said Philip Klapwijk, executive chairman of GFMS.
He said he thinks "gold's still got fuel in the tank.".
A gold dealer also said he thinks the yellow metal has more upside in store.
"In the big picture gold still has the Iran issue in the big picture. And people are still worried about that. That's why I don't think this is all over. But I do think it could form a wide base near $600 (an ounce)," the dealer said.
He added that the lack of liquidity at current levels may be keeping many players out of the market.
"The best thing even to maintain its bullish status is to calm down and for people to gain confidence. Because (lack of) liquidity is a big issue right now. It's very difficult for people to trade the market when they can't get in or out."
NYMEX July platinum tumbled $36.50 to $1,285 an ounce, below last week's record of $1,347. Spot platinum lost ground to $1,285/1,295.
June palladium was off $15.35 at $348 an ounce. Spot was down $345/353 an ounce.