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Gold settles lower, holds above support

NEW YORK: Comex gold ended lower on Friday, with traders noting light pressure on the market from a retracement in grain and energy prices and firmness in stocks and bonds, although the active June contract managed to hold for the fourth consecutive session above support at $396 an ounce.

June gold settled $1.20 lower at $397.10 an ounce, traded from $398.10 to $396.10. The market was down a slight $0.50 from last week's close. Today's volume was modest at an estimated 24,000 lots, down from Thursday's official 51,151.

Dealers quoted bullion at $394.50/$394.80.

One market source noted that, while fluctuations in commodity indices and the stock and bond markets influenced the gold market's intraday direction in the past few days, they could not pry gold prices from their recent ranges.

The spot price has held inside a $398 to $393 range for more than two weeks.

The KR-CRB commodity index retraced slightly today, after setting fresh eight-year highs in the six consecutive sessions through Thursday, as profit taking hit the petroleum markets despite an unrelenting rally in wheat, corn and soybeans.

Traders said today's Comex May options expiry after the close was of little interest to the market, which never seriously threatened the $400 strike price. Open interest in the $400 calls was light.

Continued buying was noted today in the Comex June $410 calls, however, after buying of more than 5,000 lots at that strike Thursday from a fund source, traders said.

The XAU index of North American gold mining equities retraced sharply today, losing 3.80 to 145.35, after rallying Wednesday and early Thursday despite sluggish gold prices.

The gold market showed little interest in today's U.S. economic data, including a slightly stronger-than-expected 0.4 percent rise in the March consumer price index. Comex silver settled modestly weaker on Friday, drifting back toward the middle of its recent ranges after Thursday's late rally failed to draw in follow-through buying, traders said.

A slight retracement today in the KR-CRB index of commodity futures, as well as strength in stocks and bonds, weighed lightly on the precious metals today, traders said, although the markets lacked incentives to break from their trading bands.

The Comex May options expiry after the close had little effect on today's trade. One trader said a bit of a tug-of-war occurred around the $5.50 an ounce strike price, although open interest at that price was light at just over 2,000 lots each of both puts and calls as of Thursday.

May silver settled 4.4 cents lower at $5.518 an ounce, traded from $5.56 to $5.495. The market gained 8.3 cents from last week's close.

The contract has held to a $5.60 to $5.40 range for the past two weeks.

Today's volume was estimated at 21,000, including 2,994 switches, down from Thursday's 25,385. Traders noted activity in the May/July spread, with the trade buying the May contract and selling July.

Comex warehouse stocks rose fractionally Friday by 109,206 ounces to 139,381,571. NYMEX platinum settled lower after slipping to 1-1/2-week lows early on stop-loss selling, trader said.

The precious metals complex was pressured lightly today, they added, by a retracement in the KR-CRB index of commodity futures, which had rallied strongly throughout the week, and by a rebound in stock and bond prices.

July platinum settled $3.20 lower at $410.20 an ounce, traded from $412.50 to $408.00, a range set in the morning. Traders said sell stops were hit at $409 to $408.50.

The contract gained a slight $0.40 from last week's close. The premium to June gold narrowed today to $13.10, off $2.00.

Today's volume was modest at an estimated 2,347 lots, little changed from Thursday's official 2,378.

Palladium settled barely weaker in thin, rangebound trade.

Traders said the market appeared to have steadied after slipping to one-month lows Thursday on fund selling.

They noted that consumer demand helped to buoy the sponge market, with sponge supplies remaining modestly tight in North America and at a premium to Zurich metal.

June palladium went out $0.15 was unchanged at $138.90 an ounce.-Reuter