Daily Gold Update

Source: Reuters

New York— Gold futures in New York ended higher and above $430 an ounce on Wednesday, lifted by fund buying across the precious and base metals markets, but prices kept within a broad overall range.

Silver prices shot to a one-week peak, thanks to stronger quotes for gold and copper, traders said.

Gold for August delivery finished up $1.60 at $430.90 an ounce on the New York Mercantile Exchange�s COMEX division, after moving between $428 and $431.80.

Investment funds bid gold up and selling was scant during the session, while the dollar fell from a nine-month peak against the euro, giving gold support, dealers said.

�It was up a little bit because the dollar was lower. The funds were trying to bull prices higher, but it is a temporary move,� said Leonard Kaplan, president of Prospector Asset Management.

The dollar weakened Wednesday after data on capital flowing into the United States in April came in below forecasts and too low to finance the trade deficit for the month.

U.S. net capital inflows were $47.4 billion, compared with a revised $40.6 billion in March. April�s U.S. trade deficit was about $57 billion.

Gold eventually should slide to lower ground because the U.S. Federal Reserve probably will continue to raise interest rates, which should boost the dollar and depress dollar-denominated commodities, Kaplan added.

The euro rose to $1.2122 by midafternoon, rebounding from an earlier low at $1.2018.

Independent analyst Greg Weldon said in his morning Metal Monitor report that dollar-priced gold managed to avoid breaking down even during the recent dollar rally.

That was because bullion was making its an aggressive effort to break away from and rise against all paper currencies, buoyed mainly by higher prices for energy and industrial metals, Weldon said.

A move above $438.20 in spot gold would suggest a run at the high set in late 2004 near $456, while a break below $413.30 would be a negative signal for gold, he said.

In futures, traders said a range from just below $420 to near $440 still looked intact, bracketed by physical buying at one end and bank and speculative selling at the other.

Final estimated COMEX gold futures volume was 47,000 lots.

Spot gold last reached $428.85/9.60 an ounce, above Tuesday�s New York close at $426.75/7.50. Wednesday�s London afternoon fix was $428.70.

Euro-priced gold was worth 353.81/354.51 euros, after having shot up on Monday to a record high above 356.

July silver rose 5.0 cents to $7.33 an ounce�its highest close since June 8. The day�s range ran from $7.27 to $7.40.

Spot silver was worth $7.29/32 an ounce, versus Tuesday�s close at $7.24/27. The fix was flat at $7.255.

On the board at NYMEX, July platinum gained $7.70 to $882.40 an ounce. Spot platinum reached $878/882.

September palladium was up $3.95 at $190.95 an ounce. Spot was at $189/192.