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Bullion sharply higher

NEW YORK: Comex gold remained sharply higher at midday after rallying to two-week highs early on fund buying and the election of buy stops, traders said.

At 1325 EDT, June gold was up $3.00 at $395.70 an ounce, traded from $396.80, its highest since April 2, and $393.20. Dealers quoted bullion at $393.60/$394.10.

The market stalled short of resistance at $395 in the spot price, which was also considered one of the more important nearby strike prices going into Friday morning's over-the-counter option expiry.

"This is fluff unless we get above $395 in spot," said Anthony Raia of LFG. He donwplayed the role of rallying commodities prices in gold's strength today, noting that the market had been unable to make sustained gains during repeated surges in the KR-CRB commodity futures index in recent weeks.

This morning the KR-CRB jumped to a fresh eight-year high of 263.79, led by the continuing bull run in wheat, corn and soy prices.-Reuter