Daily Gold Update

Source: Reuters

New York— U.S. gold futures eased Thursday as the euro fell amid worries the French would reject the European Union constitution and after an upward revision to first-quarter U.S. growth estimates lifted the dollar.

Silver prices firmed after industry sources said late Wednesday that Barclays Global Investors plans to file for registration seeking regulatory approval for a silver exchange-traded fund (ETF) within two months.

June delivery gold on the New York Mercantile Exchange closed 90 cents lower at $418 an ounce, after trading between $420 and $417.10.

The euro was under pressure overnight after an opinion poll before Sunday's national referendum showing French voters 54 percent against accepting the new EU document.

The shaky currency undermined the gold buying power of euro-based investors.

"It's pretty much just following the euro," said a metals broker. "They'll probably reject this thing and the euro is going to spike down. But that'll probably be a buy right down there."

The euro was quoted down at $1.2515 by midafternoon and near a fresh seven-month low against the dollar, off from $1.2601/06 at the close Wednesday.

The dollar gained on news that U.S. gross domestic product expanded at a 3.5 percent annual rate, with fewer imports of goods and services than estimated a month ago. But gold felt little impact.

The Commerce Department originally estimated that the economy grew at a 3.1 percent annual rate in the first three months of 2005.

Traders were reluctant to establish positions ahead of the Memorial Day holiday weekend. Metals trade will wrap up early on Friday and U.S. financial markets will be closed on Monday.

In fact, much of the business on the floor this week has been switches by noncommericals rolling June gold positions to August before first notice day on Tuesday.

COMEX estimated final gold volume was a massive 135,000 contracts, swollen by 15,805 switches.

Spot gold was quoted at $417.90/8.60, off from $418.60/9.30 at Wednesday's close. The Thursday afternoon fix in London was $418.00.

July silver futures rose 2.4 cents to $7.162 an ounce, trading from $7.045 to $7.24. Spot silver last fetched $7.13/16, up from $7.10/13 an ounce at the close. The fix was at $7.08.

In NYMEX metals, July platinum ended $4.40 lower at $860.90 an ounce. Spot platinum fetched $860/865.

June palladium closed $1.90 easier at $183.35 an ounce. Spot was at $182/185.