Gold off four-week high

Gold slipped on Thursday to track weaker crude oil, but tensions between Iran and the West looked set to continue to support the precious metal. Dealers expected volatile trade ahead, but they remained bullish on gold as higher oil prices stoke inflationary worries and encourage risk-averse investors to turn to safe-haven assets.
Immediate resistance was pegged at $670 an ounce. Spot gold hit an intrude day high of $666.20 and was at $665.30/666.30, down slightly from $666.10/666.66 in New York on Wednesday, when it jumped to $669.50 on geopolitical jitters and concerns about a slowing US economy. "It is a situation where external events could surely induce volatility in gold prices," said David Moore, commodity strategist at the Commonwealth Bank of Australia.
A further rise in crude oil could help gold move towards $670 in the near term, he said. Gold rallied to its highest level in 26 years at $730 an ounce in mid-May as investors diversified their portfolios on Middle East tensions, record-high oil prices that raised fears of inflation, and uncertainties in the US dollar's outlook.
Gold hit a record high of $850 an ounce in 1980. US crude oil slipped below $64 on Thursday after rallying to a six-month high the previous day on geopolitical tensions following the capture of British sailors in the Gulf by Iran and also because of US naval exercises there.
US officials denied market rumours of a clash with Iran, while Britain denied another rumour that it had sent troops to release 15 British sailors and Marines being held by Iran.
"Though markets cools off after the issue subsides, it gives markets clues of a 'potential bull run' crude oil and gold can witness when a global unrest of this order emerge," said Pradeep Uni, an analyst at Vision Commodities Services in Dubai.
Benchmark gold futures for February delivery on the Tokyo Commodity Exchange fell 6 yen per gram to 2,529 yen to track a dip in crude oil. The dollar extended a rebound against the yen after Federal Reserve Chairman Ben Bernanke said the central bank feels inflation is a threat to the economy.
On Wednesday's data showing a surprisingly tepid pick-up in US durable goods orders in February helped to compound worries about the health of the US economy as investors look for the Fed to start cutting rates as June.
The dollar rose to 117.09 yen recovering from a low of 116.38 yen hit on Wednesday. The euro slipped to $1.3305. Investors await gross domestic product data on Thursday and personal income on Friday, which could set near-term directions for the dollar and gold.
Silver fell to $13.31/13.36 an ounce from $13.37/13.40 late in New York. Platinum gained to $1,242/1,247 an ounce from $1,239/1,243 an ounce on Wednesday, when it rose to a four-week high of $1,248.50. Palladium rose to $352/357 from $351/355 an ounce.