US gold futures turned to finish higher in choppy trade on Tuesday, helped by a lower-than-expected rise in consumer prices in April, a weaker dollar and higher crude oil prices. Most-active gold for June delivery on the Comex division of the New York Mercantile Exchange settled up $4.40 at $674.50 an ounce after trading between $666.00 and $675.00.
Gold traded up amid a mixed bag of signals including the tamed inflation data and expectations for a future US interest rate cut that might weaken the dollar. The US Labour Department's Consumer Price Index (CPI), a key gauge of consumer prices, rose 0.4 percent in April, and slightly below economists' consensus.
The core rate, which excludes volatile food and energy prices, increased 0.2 percent, in line with expectations. Neal Ryan, director of economic research at Blanchard & Co, said in a note that the CPI figures showed that inflation was moderating across the board except in gasoline prices.
A lower greenback makes dollar-denominated assets like gold cheaper for investors holding other currencies. Gold also received a boost from recovered copper prices and higher oil futures. US crude futures settled up 71 cents at $63.17 a barrel and US copper contracts ended up more than 1 percent on Tuesday.
Comex estimated final gold volume at 77,646 lots and options turnover at 12,734 lots. Turnover in the Chicago Board of Trade's electronically traded 100-oz gold contract was 28,392 lots as of 2:31 pm.
Robert McEwen, chairman and chief executive of Canada-based US Gold Corp said on Tuesday that gold prices could trade above $2,000 per ounce in 2010, possibly reaching $5,000. On the other hand, commodities research firm and consultant CPM Group forecast the price of silver to outperform that of gold in 2007 because of what it termed the bullish dynamics of silver.
Spot gold was quoted at $672.30/2.80 versus $668.20/9.70 late on Monday. The London afternoon gold fix was set at $668.25. Comex July silver closed up 8.00 cents at $13.315 an ounce, traded from $13.080 to $13.360.
Spot silver was quoted at $13.21/3.24 which was off from $13.11/3.16 on Monday in New York. In London, silver was fixed at $13.02. Refiner Johnson Matthew Plc said platinum might set a new record of $1,400 an ounce over the next six months, buoyed by interest in exchange-traded funds, limited stocks and fund buying.
July platinum gained $10.30 cents to end at $1,339.60 an ounce. Spot platinum was quoted at $1,330.00/1,335.00. June palladium closed down $2.25 at $358.45 an ounce. Spot palladium fetched $358.00/362.00.
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