Gold News & Info

Source: Reuters

New York— Gold idled in New York early Thursday as a letup in the dollar's rally alleviated pressure on funds to cash in commodity plays, and financial markets looked to minimize trading risk before a long weekend.

With U.S. exchanges closed for Good Friday and many overseas trading centers closed on Monday for Easter, brokers said floor activity in the gold pit at the COMEX division of the New York Mercantile Exchange was limited to the switching of noncommercial positions before the active April contract goes into delivery next week.

April gold at 9:36 a.m. (1436 GMT) was up 20 cents at $425.60 an ounce, trading between $424.40 and $426.50. The contract fell 1.4 percent on Thursday and has shed $24 since an investor-led rally took it to a high for the year at $448 on March 11.

"The only thing of any size that's trading out there is the April-June roll, " said a floor broker. "We had quite a selloff over the last several days in here. The question in everybody's mind here is: Have we seen the bottom yet?"

The dollar has rallied sharply this week on worries that the Federal Reserve might step up the pace of raising interest rates if the economy overheats. The Fed hiked short-term rates for the seventh time in a year on Tuesday, and indicated it was paying more attention to inflation risks.

Rising U.S. deposit rates make commodities less attractive, since they offer no yield. With the dollar rally making commodities more expensive to many overseas investors, the time seemed right for them to take some of their winnings in gold off the table.

"There have been good reasons out there for some of the funds to liquidate some of their long positions — the dollar, oil is off a little bit, et cetera, et cetera," said James Verraster, president of Auramet Trading. We're coming up on the long Easter weekend, where it will be quiet and it's quarter end next week."

Spot gold was quoted at $425.30/6.00, up from $424.50/5.10 an ounce at the close Wednesday. The morning fix in London was at $424.90.

May silver was up 1.5 cents at $7.00 an ounce, in a $6.92-$7.02 range. Spot silver was at $6.96/99, up from $6.92/95. It fixed at $6.935.

April platinum was up $7.50 at $863.50 an ounce. Spot platinum was at $858/862.

June palladium was up 60 cents at $194.50 an ounce. Spot palladium fetched $191/195.

Before bouncing on Thursday, platinum dropped $34 in the previous week. Palladium fell from $219 on March 4 to a 20-day low at $190 on Wednesday.

"We cleaned out some stops," said Ralph D'Esposito of RJ Futures. "We might have to do a little more work on the downside, especially in palladium."