2013.08.2806:09:01UTC+00Gold prices retreat after run into bull market

Gold futures slide down early Wednesday, with the safe-haven asset taking a breather after soaring into a bull market on concerns about military action versus Syria.

In electronic trade, gold for December delivery backed down $4.70, or 0.3%, to $1,415.50 an ounce.

The contract on Tuesday jumped $27.10, or 2%, to $1,420.20 an ounce on the Comex division of the New York Mercantile Exchange. That was the highest settlement since mid-May, according to FactSet data, based on the most-active contracts.

The hike put gold at least 20% above intraday lows hit by Comex gold futures of around $1,180 on June 28. Technically, a bull market is an increase in worth of any market security by at least 20%.

Tuesday’s move came as the U.S. and its allies reportedly weighed a military strike against Syria, which is accused of launching a chemical attack on civilians near rebel-held areas around Damascus last week.

“There must be a response,” White House spokesman Jay Carney said Tuesday. “What form that response will take is what [President Barack Obama] is assessing now,” he said, adding that the White House is not considering putting “boots on the ground” in Syria.

“Syria, unless we get a major push-back from Russia, should produce a short-term event, albeit in these markets an event that could be enough to take gold ... [to] the next leg to $1,452,” Kitco global trading director Peter Hug said in a note Tuesday.

Nymex gold futures on Tuesday reached as high as $1,424 an ounce.

Prices for the precious metal are up more than 8% as August comes close to an end.

“The fact that investment demand has picked up again somewhat of late, coupled with the escalating Syrian conflict, could see the upswing continue,” strategists at Commerzbank led by Eugen Weinberg wrote Tuesday.

Data from the Commodity Futures Trading Commission for the week to Aug. 20 showed money managers increased bets that gold prices would extend gains.

The move was in part because of short coverings, but fresh long positions were also being established, analysts at Barclays said on Monday.

Adding to price support for gold “is the beginning of the debate on the U.S. hitting the debt limit, à la 2011, by mid-October,” wrote Hug.

Treasury Secretary Jacob Lew said Monday the U.S. government will reach the debt ceiling by mid-October and will be unable to borrow money to pay its bills. Some experts expected the government to hit the debt limit in mid-November.

Gold prices remain down by more than 15% on a year-to-date basis, with much of the suffering stemming from anticipation the U.S. Federal Reserve will reduce the pace of its monetary stimulus later this year.

Elsewhere around the metals complex Wednesday, September silver slouched 7 cents, or 0.3%, to $24.59 an ounce. It finished Tuesday’s Nymex session greater by 2.7%.

September copper was unaltered at $3.33 a pound, and October platinum climbed $5.30, or 0.4%, to $1,537.40 an ounce, winning back a part of Tuesday’s loss of 0.8%.

September palladium relinquished $2.65, or 0.4%, to $746.50 an ounce.