Daily Gold Update

Source: Reuters

New York— U.S. silver futures plunged to a one-month low on Thursday as traders rushed to roll their positions out of the nearby contract before delivery starts, while gold fell to a nine-day low, tracking a weaker euro.

Other precious metals also went down due to speculative selling, as palladium touched a one-month low and platinum a nine-day low.

Silver hit its cheapest level since March 28 on the eve of first notice day for May delivery, as brokers and investment funds unwound positions and completed May-into-July contract rollover before Friday.

"Silver had a significant day to the downside on liquidation and rollover," said Scott Meyers at Pioneer Futures.

Most-active July silver futures on the COMEX division of the New York Mercantile Exchange fell 23.3 cents, or 3.24 percent, to $6.948 an ounce, after dealing from $7.195 to $6.91. May lost 22.8 cents to $6.907, in a $7.15-to-$6.85 range.

Final COMEX silver volume was estimated at a busy 56,000 contracts, with 6,488 switches. Open interest in COMEX futures fell 5,577 to 106,410 lots.

Spot silver also eroded to its lowest since late March at $6.88/91, against Wednesday's New York closing quote at $7.12/14. The fix in London was at $7.095.

Gold stayed in its recent trading range between $430 and $440, however, and was still seen linked to the dollar's moves after U.S. data showed a below-consensus rise in first-quarter gross domestic product.

June delivery gold sank $1.70 to $432.40 an ounce, after dealing from $435.30 and $432.20, which marked its weakest close since April 18.

The euro slid to $1.2888 from well above $1.29 earlier.

"Gold just meandered lower. It's going to keep an eye on the euro tomorrow. I think that is really still the play," Meyers said.

The U.S. government said the economy grew at its softest pace in two years in the first quarter, slowing to a 3.1 percent annual rate of expansion as consumers and businesses curbed spending amid rising prices. Economists had forecast GDP would grow at a relatively more robust 3.6 percent rate.

Analysts said the May 3 U.S. Federal Reserve meeting on interest rates also remained a key focus for gold traders. The Fed has lifted official rates by a quarter percentage point seven times since June.

Precious metals consultancy GFMS said gold prices may punch above the 16-1/2-year highs hit last December on renewed investor buying this year fueled by dollar weakness and twin U.S. deficits.

"I think we're reasonably sure that we will see a $470 or $480 target price, with a distinct possibility of a pop to $500," GFMS Chairman Philip Klapwijk told Reuters.

Spot gold ended at $430.65/1.40 an ounce, its lowest since April 19 and below Wednesday's close in New York at $432.50/3.00. Thursday's afternoon fix in London was at $432.50.

July platinum fell $5.90 to $865 an ounce — a low dating to April 19. Spot platinum hit $863/867.

June palladium lost $7 to $196 an ounce. Spot palladium was quoted at $194/197.