US gold futures finished slightly higher in choppy trade Friday on weak sentiment, capping a volatile week when contracts scaled a record high on Tuesday only to post heavy losses on Wednesday. President George W. Bush's plan to give the US economy temporary tax cuts and other measures totalling about $150 billion failed to boost the gold market.
However, price volatility of the yellow metal could rise in the near term because of uncertainties in the other financial markets. Still, gold should benefit from flight-to-quality demand as the stock market lags, analysts said.
The active gold contract for February delivery at the COMEX division of the New York Mercantile Exchange settled up $1.20 at $881.70 an ounce. February futures hit a high of $899.40 and bottomed at $870.60, a one-week low. The February contract dropped more than 2 percent on chart-based resistance Wednesday, after failing to breach its record high of $916.10 set on Tuesday.
Bush said Friday he wanted to work with Congress on a stimulus package that would focus on tax rebates for families and incentives to encourage business investment. The White House said the package could create about 500,000 new jobs.
COMEX estimated final gold futures volume at 129,323 contracts. Total turnover in Chicago Board of Trade electronic 100-oz gold futures was 27,911 lots at 3:12 pm EST (2012 GMT) http://www.cbot.com/cbot/pub/page. At 2:15 pm, spot gold was quoted at $881.90/882.60 an ounce, compared with Thursday's New York close of $876.70/877.40. London bullion dealers fixed the afternoon spot reference price at $882.
March silver finished up 20.5 cents, or 1.3 percent, at $16.215 an ounce, trading from $15.715 to $16.420. Spot silver was at $16.14/16.19, versus $15.87/15.92 late Thursday. London silver was fixed at $15.825. April platinum eased 30 cents to close at $1,565.50 an ounce. Spot platinum was quoted at $1,556/$1,561. March palladium finished down $1.20 at $375.05 an ounce and spot palladium fetched $367/$372.
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