US gold futures jumped early Wednesday on trade and investment fund buying as the dollar and stocks fell in choppy trade as Federal Reserve chief Alan Greenspan began speaking before Congress, dealers said.
August delivery gold advanced $2.60 to $422.80 an ounce by 10:05 am on the New York Mercantile Exchange's COMEX division, moving within a $420-$423.30 range.
Futures shot back above a previous key support level at $422 an ounce and stood near the 10-day moving average by midmorning, bolstered by fund buying after an initial burst of industry purchases. "We had some trade buying earlier and it looks like they fished out some stops (stop-loss buy orders), and that was it," said a New York floor broker.
Gold slightly pared its gains after Greenspan said he saw steady economic growth as well as contained inflation, adding that the Fed would keep raising interest rates.
That scenario tends to prop up the greenback and weigh on gold by making the dollar-denominated metal less attractive for overseas investors.
But a higher euro, weak US stocks and geopolitical concerns still supported hard assets such as precious metals as Greenspan began two days of testimony on the economy. "Gold and silver look good and are starting to turn the corner," said Scott Meyers, a senior analyst at Pioneer Futures. "We built a nice bottom and all the indicators were oversold and the charts were starting to give buy signals in the last day or two."
Technically, Meyers put key resistance in COMEX August gold at $428, and for silver futures $7.18 an ounce on a settlement basis.
Support was traced down to $418.20 and $415.80 in gold.
Spot gold changed hands at $422.50/3.20 an ounce, above Tuesday's late New York quote at $419.50/0.20. Wednesday's afternoon fix in London was at $422.15.
Silver got a boost from copper futures at record highs nearing $1.60 a lb., as well as stronger gold and the euro.
September silver stood 9 cents firmer at $7.075 an ounce, trading from $6.975 to $7.11.
Spot silver reached $7.03/06 an ounce, from $6.94/97 previously. It fixed at $6.965.
October platinum was up $1.80 at $872 an ounce. Spot traded at $869/873.
September palladium hit a fresh three-week high, rising 65 cents to $189.50 an ounce. Spot edged to $186/190.
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