Daily Gold Update

Source: Reuters

New York— U.S. gold futures settled a whisker higher on Friday as the dollar gave back earlier gains against the euro, raising bullion's allure for investors, traders said.

Active June delivery gold gained 40 cents to end at $428.80 an ounce on the New York Mercantile Exchange's COMEX division, after trading from $426.40 to $429.40.

Dealers said firmer gold prices mimicked the euro's moves in light dealings ahead of the weekend, rising despite slight pressure from a declining oil price.

James Moore at TheBullionDesk.com said in a note that bullion should keep to its $422 to $428 trading range heading into next week.

The market awaits Tuesday's U.S. data on international trade and the federal budget, as well as word from the International Monetary Fund about a proposal to sell part of its gold to fund Third World debt relief, Moore said.

The Bank of France reduced its gold reserves by 40 tonnes in 2004, Governor Christian Noyer said on Friday, noting future sales of any of its 2,984.7 tonnes would depend on the central bank's judgment of market conditions.

The BoF has said it plans to sell 500 to 600 tonnes of gold over the next five years.

The euro rose 0.4 percent from late Thursday to $1.2907, as currency players bought the 12-nation currency and sold dollars by early afternoon.

A lower greenback tends to boost the dollar-denominated metals by making them cheaper for non-U.S. investors.

Oil prices extended declines from recent record highs amid rising U.S. crude stockpiles and a strengthening dollar.

Lower oil prices can pressure gold as the risk of inflation is seen easing. Investors historically have used gold as an inflation hedge.

U.S. light crude ended down 66 cents at $53.45 a barrel.

Chartist pegged support in June gold at $425 and then $421 to $420 with resistance at $431 to $432.

Estimated COMEX gold turnover was a mild 31,000 contracts.

Open interest fell 915 lots to 275,135 lots as of April 7.

Spot gold last fetched $426.60/7.30 an ounce, compared with Thursday's New York close at $426.00/6.80. The afternoon fix in London was $425.20.

Silver trading remained thin and choppy, with the dollar providing direction and prices pivoting around $7 an ounce.

May silver rose 9.0 cents to $7.165 an ounce, trading from $7.015 to $7.17. Spot silver priced at $7.13/7.16 vs. $7.04/07 previously. It fixed lower at $7.03.

July platinum fell $5.30 to $860.30 an ounce. Spot platinum reached $858/862.

June palladium fell $2.05 to $198.95 an ounce. Spot palladium traded to $196/199.

"Platinum continues to find plenty of room in the $840/880 an ounce range while palladium will struggle to clear $220 an ounce due to its large supply surplus," said Moore.