Daily Gold Update

Source: Reuters

New York— U.S. gold futures closed with slight losses on Tuesday, under pressure from a higher dollar, as currency dealers looked past a widening U.S. trade gap to boost the greenback.

Shortly after the COMEX close, however, gold prices edged up with the euro after the release of minutes from U.S. Federal Reserve's March meeting cited some risk of inflation but no need for faster interest rate hikes.

June delivery gold on the New York Mercantile Exchange's COMEX division settled at $429.30 an ounce, down $1.10 on the day, after trading between an earlier three-week high at $432.40 and $428.30.

After gold settled, the minutes showed the Fed's policymaking committee saw inflation risk as a bit on the "upside", although the Fed would retain its measured pace of interest rate increases.

In line with modest euro gains, COMEX June gold ticked up 70 cents to $430 in midafternoon electronic NYMEX ACCESS trade.

"That language is proving a bit euro friendly and maybe gold can hold around here," said Refco analyst Tom Boustead.

He added, however, that direction in gold appears to be dependent upon the dollar's moves.

The euro had skipped back above $1.2913 after the minutes, compared with the day's low at $1.2863.

A lower U.S. currency boosts gold by increasing its safe-haven luster for investors and making the dollar-denominated metal cheaper for non-U.S. buyers.

Meanwhile, the U.S. trade gap grew in February to a record $61.04 billion, as the economy sucked in record imports. The deficit widened 4.3 percent from the prior month, despite a slight increase in exports to a record $100.5 billion.

The monthly shortfall was greater than the median estimated of $59 billion, and it could make economists trim their forecasts for first-quarter U.S. growth, analysts said.

Gold market watchers said they were awaiting portfolio figures due Friday to see if the United States was able to attract enough capital from overseas to cover its current account gap.

Players also are hoping for clarity soon on a proposal for the International Monetary Fund sell part of its gold reserves to fund Third World debt relief. The IMF will meet this weekend to discuss the plan.

Brokers were pegging COMEX June gold futures as in a broad $426-432 trading range."

Spot gold last was quoted at $426.90/7.70 an ounce, compared with Monday's New York close at $428.25/9.00. The afternoon fix in London was $427.30.

May silver fell 10.0 cents to $7.155 an ounce, after moving from $7.31 to $7.10. Spot silver ended at $7.12/15 vs. $7.23/26 previously. It fixed at $7.235.

July platinum $3 to close at $863.80 an ounce. Spot platinum was worth $859/864.

June palladium slid $3.65 to $197.30 an ounce. Spot palladium hit $195/199.