Daily Gold Update

Source: Reuters

New York— U.S. gold futures closed firmer on Thursday, boosted by speculative buying amid a soft dollar, but the market still held within its recent narrow range as traders awaited Friday's report on U.S. payrolls.

"Today, nobody wanted to trade because tomorrow is the employment number," said Leonard Kaplan, president of Prospector Asset Management. "My hunch is the number is going to be pretty good, and gold will probably come down with the euro."

Gold for June delivery on the New York Mercantile Exchange's COMEX division rose 70 cents to end at $430.70 an ounce, after roaming a range between $428.80 and $432.50.

Estimated volume was a thin 38,000 contracts, versus Wednesday's also-light 35,511 lots. Open interest fell 3,015 to 287,524 contracts as of May 4.

Though New York markets were buzzing after a minor pre-dawn blast outside the British consulate in Midtown Manhattan, gold shrugged off the news on Britain's election day, with polls forecasting Prime Minister Tony Blair would be returned to power.

New York police were investigating the explosion, which shattered some windows but caused no injuries.

"This is short covering, but gold is still a bit confused here," a gold floor trader said. "We are all waiting for the jobs report."

Economists expected Friday's report to show nonfarm payrolls rose in April by 170,000. In March, only 110,000 new jobs were created, the smallest gain in eight months, which fueled concern about an economic slowdown.

Prospector Asset's Kaplan said he expected the figure to be closer to 200,000.

However, increasing worries about U.S. economic growth left markets, particularly currencies, on the volatile side. The euro whipped around in a range but later settled down near $1.2940, little changed on the day.

A softer dollar usually lifts gold prices because the asset is used as a alternative to the U.S. currency.

Meanwhile, U.S. business productivity growth accelerated unexpectedly in the first quarter but in a signal of slowly building price and profit pressures, labor costs also picked up.

Separately, initial claims for jobless benefits in the week ended April 30 climbed to 333,000 from a revised 322,000 the prior week. A rise of 325,000 had been expected.

The dollar was near seven-week lows versus the yen, despite efforts by the Chinese finance minister to quell market talk of an imminent yuan revaluation.

In gold news, Swiss National Bank board member Philipp Hildebrand said the IMF should be wary of linking a decision to sell gold to a much-politicized debate about how to use the proceeds.

Britain is pushing for IMF gold sales to fund Third World debt relief but the idea has run into U.S. opposition because of the possible impact on the global bullion market.

Spot gold last reached $429.25/430.00 an ounce, above Wednesday's closing level in New York at $428.85/9.60. Thursday's London afternoon fix was at $429.15.

July silver rose 5.0 cents to $7.063 an ounce, trading from $6.985 to $7.10. Spot silver hit $7.02/7.05, up from its prior close at $6.97/7.00. The fix was $7.05.

July platinum settled at $876.70 an ounce, up $1.20. Spot platinum was quoted at $873/878.

June palladium finished at $196.60 an ounce, a rise of $2.25. Spot palladium touched $194/198.