Gold News & Info

Source: Reuters

New York— COMEX gold rose Tuesday as the dollar weakened on anticipation that the Federal Reserve would leave interest rates unchanged, which indeed the Fed announced after the futures market had closed.

June gold settled up $4.30 in lackluster trade at $391.80 an ounce, trading from $386.90 to $394.00.

Spot gold was last quoted at $391.10/1.80, up from $386.90/7.70 late Monday. The London afternoon fix was $391.25.

"Pressure has been seen on the dollar all day as FX (foreign exchange) traders speculate a rate hike by the U.S. is still some time away," wrote James Moore of TheBullionDesk.com. "Profit-taking and speculation of French gold sales will continue to slow or cap further gains."

French Finance Minister Nicolas Sarkozy said Tuesday that the Bank of France will sell 500 to 600 tonnes of gold over the next five years under the renewed European sales agreement announced early this year.

In its announcement almost an hour after the COMEX close, the Fed said the risks of inflation and deflation were balanced but, as expected, dropped a reference to policy patience in statements since 2003. Financial markets expect it to lift rates from 45-year lows sometime this summer.

The euro rose above $1.21 from Monday's close at $1.1937/41, making gold more affordable to European investors.

Meanwhile, the pound surged after a holiday in the UK on Monday. Britain's strong economic recovery has made a UK rate hike a near certainty at the Bank of England meeting on Thursday, dealers said.

"If (a Fed hike) does take place, that should be a negative point for the gold because the dollar of course would tend to move higher. But then again maybe England is running ahead of us," said bullion dealer Frank Aburto at F.C. Stone.

Bernard Hunter, a director at bullion dealer ScotiaMocatta in Toronto, said gold has also had support from strong physical demand after the sell-off last week. June gold bottomed at $377 an ounce on Thursday.

"A lot of the pressure has been taken out of the market," he said. "It's likely that the weaker longs have been taken out of the equation and the bullion market still seems to be friendly toward gold. Certainly other economic conditions are consistent with that view at the moment."

July silver closed up 2.0 cents at $6.048 an ounce after trading $6.01 to $6.175. It fell 6.2 cents on Monday when many traders were out.

London and Tokyo were closed Monday and Japanese markets will remain so until Thursday due to the Golden Week holiday.

Spot silver fetched $6.02/06, off from $6.05/07 late Monday. The fix was $6.10.

NYMEX July platinum closed up $7.50 at $814.20 an ounce. Spot platinum was quoted at $815.00/820.00.

"Tokyo's closed. So it's less than optimal liquidity. After last week's sell-off, it's just regaining its feet here on not a whole lot of volume," said a dealer at a precious metals refining company.

June palladium slipped $5.70 to $255.80 an ounce. Spot closed at $253.00/258.00.