Daily Gold Update

Source: Reuters

New York— Gold futures tumbled on Thursday, closing at a 10-day low after slipping out of this week�s trading range of $440 to $445 an ounce, as the dollar rebounded against the euro, dealers said.

The greenback�s slight recovery hit metals across the board, with players positioning before an expected hike in U.S. interest rates next week, analysts said.

Platinum fell from a contract high set overnight on talk of tighter availability of South African metal, while other precious metals also declined.

Gold for April delivery at the COMEX division of the New York Mercantile Exchange dropped $5.10 to $439.10 an ounce, after trading from $444.50 to $437.70 which marked its lowest price since March 8.

�The dollar is doing a bit better and there hasn�t been a lot of fund interest in gold�you�ve had dealer and bank selling� and the funds have not been buying, said Refco analyst Tom Boustead.

�Gold seems to be stuck below resistance at $445 and they are liquidating now. I think there must be some general fear that the dollar may correct a bit,� he added.

The dollar was pushed higher Thursday as investors sold emerging market debt and currencies and sought safer ground in U.S. Treasuries before the weekend. The euro was off 0.3 percent at $1.3387 by midafternoon.

On Tuesday, the U.S. Federal Reserve is widely expected to lift rates by a quarter percent to 2.75 percent. Rate hikes tend to prop up the dollar and, thus, weigh on gold.

A higher U.S. currency usually depresses gold as the dollar-denominated metal becomes costlier for non-U.S. buyers.

Boustead said markets were specifically awaiting the Fed�s statement accompanying the decision on rates next week, which could give a clearer signal about the central bank�s approach to monetary policy for later in the year.

Physical buying emerged below $440 to cushion gold�s fall, but the market failed to draw much support from U.S. crude oil prices scaling new highs above $57 a barrel, dealers said.

Gold sometimes rises when oil is up as investors have historically turned to the metal as an inflation hedge.

Brokers put initial technical support in COMEX April gold at $438 and then at $435, with resistance at $445 and $449.

April gold hit a 16-1/2-year peak at $460.50 on Dec. 2.

Spot gold last was priced at $438.25/9.00 an ounce, versus Wednesday�s New York close at $443.30/444.00. Thursday�s afternoon London fix was at $438.60.

�Further base building around the $440 level looks set to be seen over the coming sessions with the dollar still providing a great deal of the metal�s direction,� said TheBullionDesk.com in a report.

It added that, below the $435 area, support in spot gold rests at the 100-day moving average at $432.55.

In NYMEX trade, April platinum fell from a contract high at $889 an ounce to settle at $879.50, for a loss of $8.30. Spot platinum $876/881. Futures shot above $900 in late January.

June palladium lost $3.90 to $202.65 an ounce. Spot palladium fetched $198/202.

May silver fell 4.5 cents to $7.407 an ounce, after moving from $7.495 to $7.34. Spot silver was last at $7.34/37 compared to $7.40/43. It fixed at $7.36.