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Comex gold settles modestly firmer in choppy trade

NEW YORK: Comex gold settled modestly firmer in choppy trade Thursday, still finding support at its recent lows but unable to rally convincingly despite surging grain and energy prices and weakness in the stock market.

Most-active June gold settled $0.80 higher at $398.30 an ounce, traded from $399.20 to $396.30.

The market seesawed inside the range throughout the session, often mirroring fluctuations in the stock market.

Today's volume was heavy at an estimated 55,000 lots, up from Wednesday's modest 23,327.

Dealers quoted bullion at $395.70/$396.00.

Early in the session the market gyrated on U.S. producer price data that sent mixed signals, although fund selling helped push prices to a test of Wednesday's lows.

The market rallied modestly at mid-morning, boosted by a surge in the KR-CRB commodity futures index to new eight-year highs and a subsequent drop in the stock market, but the June futures stalled short of the $400 mark. They moved back into negative territory before managing a late bounce.

Traders said fears of producer selling from South Africa after the rand's recent slide continued to weigh on sentiment, as did the prospect of additional central bank sales.

"This market's struggling to do better," said Dinsa Mehta, managing director at Chase Manhattan.

He also noted a growing disparity between the sluggish gold bullion market and rallying gold equities.

The XAU index of North American gold mining shares rose over five points in the past two sessions to today's high of 151.56, although late in the session it trailed off to close lower at 149.15.

The U.S. March consumer price index is due Friday at 0830 EDT/1230 GMT, with analysts' average forecast indicating a rise of 0.3 percent versus February's 0.2 percent gain. March retail sales, also due at that time, were expected to rise 0.3 percent compared with February's rise of 0.8 percent.

SILVER

Comex silver settled higher, as the precious metals received a modest lift from continuing rallies in the grain and energy sectors, traders said.

May silver ended 7.0 cents higher at $5.562 an ounce, near the top of the day's $5.57 to $5.48 range. Volume was estimated at 21,000 lots, up from Wednesday's light 13,131.

Traders said the silver market appeared to draw more strength than gold did from today's grain market rally, adding it may soon make an assault on key overhead resistance at $5.58 to $5.60, followed by $5.65/$5.64.

Comex warehouse stocks fell marginally Thursday by 48,111 ounces to 139,272,365, according to data released after the close.

The U.S. March consumer price index is due Friday at 0830 EDT/1230 GMT, with analysts' average forecast indicating a rise of 0.3 percent versus February's 0.2 percent gain. March retail sales, also due at that time, were expected to rise 0.3 percent compared with February's rise of 0.8 percent.

PLATINUM

Nymex platinum settled higher on Thursday, lifted with silver by continued gains in grain and energy prices, traders said.

The market was unable, however, to surmount nearby resistance at $414 an ounce in the July contract, where trade selling put a lid on prices.

July platinum settled $2.80 higher at $413.40 an ounce, traded from $413.90 to $410.10, a range set by midday. Volume was moderate at an estimated 2,380 lots, up from Wednesday's light 1,652.

The premium to June gold widened $2.00 to $15.10, as the gold market proved unable to maintain early gains on the grain and energy rallies.

June palladium went out $1.35 lower at $138.90 an ounce.-Reuter