Daily Gold Update

Source: Dow Jones

New York— Precious metals were trading mostly higher late Thursday, in quiet dealings ahead of the Easter holiday, with gold managing to break through and hold above a key resistance level, aided by a drop in the U.S. dollar, said participants.

Dealers and analysts were upbeat because Comex June futures and spot gold finished above $260.00 an ounce.

.It.s a good figure to end the week,. said a dealer in New York, referring to the close above $260/oz. .But trading was kind of thin, and it.s hard to say how much should be read into this.

.The key to the semi-rally was the weaker (U.S.) dollar, and only further weakness there will help. the metal, he added.

A weaker dollar deters sales from producing countries, while it enhances the purchasing power of consuming nations.

A second dealer agreed, saying gold was also supported by tighter lease rates and a relatively stronger Australian dollar, but doesn.t expect Comex June futures to move outside the range between .$256-$257/oz on the downside and the low $260s on the upside,. barring a dramatic drop in the greenback, which isn.t expected.

The Aussie dollar was changing hands at $0.5098 late Thursday in New York, higher than $0.5071 in earlier trading, and moving above $0.5000 for the first time since late March.

Silver continued its subservient role to gold, tracking the yellow metal higher, but in thin business in a narrow range.

In the PGMs metals complex, palladium continued to drift lower, pressured by selling in the physical market, said dealers.

.With this closing under $660 (ounce), I think palladium has unveiled another leg to the downside,. said a dealer in New York, who predicted the metal is heading towards $600.00/oz in the near term.

Platinum, meanwhile, managed to pick up the pace to a good close on mostly stop-loss buy orders from small funds, said dealers.

One said that if Nymex July futures open above $582/oz Monday, the metals might turn the corner for another upside trend, with more fund buys likely.

But he and other traders warned volumes might be very thin early next week because the London.s financial markets will close Monday with trading resuming Tuesday.

U.S. and U.K. financial markets will be closed Friday.