Gold prices fall along with dollar

Gold and silver prices pulled back Wednesday as investors mulled the economic impact of weaker-than-expected productivity data in the U.S. and an interest rate hike in Europe.

In other commodities, agriculture futures retreated while the energy markets finished mixed.

Gold prices fell as the U.S. dollar slipped against major world currencies. The dollar's decline came as the Labor Department reported disappointing worker productivity in the U.S.

While productivity slowed in the first three months of the year, labor costs climbed faster than expected, raising inflationary concerns.

The dollar fell against the yen and other major currencies but stayed afloat against the euro. The European Central Bank on Wednesday raised its benchmark interest rate _ a move that would normally boost a currency. But the bank's suggestion that subsequent hikes in the near term would be unlikely unnerved investors in the euro.

Gold for August delivery edged down 50 cents to settle at $674.60 an ounce on the New York Mercantile Exchange, after earlier dropping nearly $5. July silver followed, falling 9.5 cents to close at $13.717 an ounce.

Overseas, the industrial metals slipped to settle lower on the London Metal Exchange, with notable losses in zinc.

Copper traders shrugged off falling inventories and concerns about labor negotiations taking place in Mexico and Chile, where workers at several mines have threatened to strike. Nymex copper shed 3.75 cents to close at $3.404 a pound.

The energy market, meanwhile, reacted to a mix of U.S. supply data and new geopolitical concerns in the Middle East.

Gasoline futures fell after the Energy Information Administration reported a larger-than-expected build in U.S. inventories.

It's not uncommon that "you would have gasoline inventories improving post-Memorial Day through the month of June" as gasoline demand typically softens in the first half of the month, said Kevin Lindemer, head of Global Insight energy group.

Nymex July gasoline futures finished down 1.69 cents at $2.1904 a gallon.

The EIA report showed a small build in crude oil inventories, roughly in line with analysts' expectations, but contained a surprise drop in the rate of refinery utilization.

Crude oil prices recovered from an initial drop, boosted by the weak refinery usage and developments in Iraq.

Turkish troops crossed into northern Iraq on Wednesday to tail Kurdish guerrillas. Turkey's foreign minister denied its troops had entered Iraq, but nervous oil traders pushed oil prices higher still.

Light, sweet crude for July delivery rose 35 cents to settle at $65.96 a barrel on the Nymex.

In agriculture, corn, soybean and wheat prices declined on the Chicago Board of Trade.

Trading of soybean oil and soybeans soured after Malaysia's palm oil futures couldn't extend their gains overnight, said Dan Basse, president of Ag Resource Co.

The U.S. soybean market has been paying special attention to surging palm oil prices in Asia, which hit new all-time highs then closed lower overnight on profit-taking. Demand for palm oil for food has swelled amid strong economic growth in China, Basse said.

Soybeans for July delivery lost 6 cents to end at $8.222 a bushel on the CBOT, and soybean oil futures also settled lower.

Wheat futures fell as prices weakened on European markets and traders took profits, Basse added. The July contract shed 7.4 cents to settle at $5.196 per bushel.

July corn followed the other products lower, dipping 5.4 cents to close at $3.746 a bushel.