NEW YORK, Oct 28 (Reuters) - COMEX gold rolled back more of last week's gains Tuesday, shedding 1.25 percent as the dollar recovered against the euro and floor traders adjusted futures positions during the expiration of November options.
The liquidation of long positions kept the pressure on for a second straight day, with commercial selling also in the mix, as risk was reduced before the Federal Reserve concluded its regular interest rate meeting after the gold close.
"I would say it was a little bit of dollar strength combined with month-end producer selling," said Andy Montano, a director at bullion dealer ScotiaMocatta. "Typically, at the end of a period producers clean out their closets to make sure they are selling everything they can to get their revenue recognized."
December gold fell $4.80 to settle at $383.40 an ounce, after touching $388.70 and a 6-day low at $383.00.
Volume was a moderate 42,000 contracts.
The Fed, as expected, held U.S. short-term interest rates steady at 45-year lows, saying its predominant concern was inflation becoming too low and that it could maintain its easy monetary policy for a considerable period.
Gold will have to wait until Wednesday to take in the reaction by currency, stock and bond markets.
The November options rolled off at the end of the COMEX session. There was far more interest in December options, which expire in late November. But dealers said the market was also waiting for expiration of over-the-counter options in London on Wednesday.
Gold surged $23 last week as the euro rose to a 15-day high, not far from its lifetime peak from late May. Gold ran out of steam less than $2 from September's 7-year high at $394.80.
"It's just been coming off due to the slightly weaker euro," said a dealer at a precious metals refining company. "Otherwise, it's consolidating after the huge rally we've seen over the last few days."
Open interest jumped 8,219 on Friday as gold surged to $393.00. Dealers said many of those late longs were scared out by the lack of follow through Monday and Tuesday. Open interest came off 606 contracts in Monday's $1 fall.
"There seems to still be a very pessimistic note on the outlook for the U.S. dollar," Montano said. "If that pessimism comes to pass then it makes sense that gold will go back up and test the highs and the all-important psychological level of $400 an ounce. That's been the play all along."
The euro was last quoted at $1.1675/79, down from $1.1745/51 at the close.
Spot gold fell to $382.50/3.25 from Monday's last quote at $387.65/8.15. London bullion dealers fixed the afternoon reference price at $384.40.
December silver tumbled 9.5 cents, or 1.8 percent, to $5.097 an ounce, touching $5.19 and $5.09.
Spot silver was last quoted at $5.08/10, down from $5.17/19. The fix was $5.15 an ounce.
NYMEX January platinum rose $2.20 to $747.90 an ounce. Spot platinum fetched $745.00/750.00.
December palladium rose 65 cents to $199.70 an ounce. Spot palladium fetched $195.00/200.00.