COMEX gold rose to within a whisker of $400 an ounce Tuesday morning, as the dollar fell and attacks in Saudi Arabia and continued violence in Iraq over a three-day weekend fuelled demand for safe-havens.
August gold at 10:02 am EDT was up $3.30 at $398.20 an ounce, trading from $394.50 to $399.80, its highest since April 28. Clearing the $400 level is seen depending on outside factors.
"You probably have to go over $402 to find the huge stops," said a floor broker, referring to pre-placed buy orders.
Investors sought an inflation hedge, one of gold's traditional functions in global financial markets. Oil prices surged $1.50 on Tuesday, back above $41 a barrel, after Islamic militants over the weekend attacked offices of Western companies in the Saudi oil city of Khobar, killing 22 people and raising alarm over political instability in the largest oil producer.
"I think it all depends on oil," said Graham Leighton, a vice president of bullion dealing at Societe Generale. "We're going to be mastered, playing to both oil and the dollar today."
Spot gold was quoted at $396.85/7.60, up from the close Friday at $393.80/4.55, when New York trading shut down early for the Memorial Day holiday on Monday. London markets were also closed for a bank holiday on Monday. Tuesday's afternoon fix in London was at $397.20 an ounce.
July silver was off 1.0 cent at $6.10 an ounce, trading from $6.20 to $6.095. Spot silver was quoted at $6.07/10, down from $6.09/12 late Friday. Monday's fix was $6.17.
July platinum was up $11.30 at $840.50 an ounce. Spot platinum last fetched $842.00/847.00.
June palladium was $4.45 lower at $253.00 an ounce. Spot went out at $250.00/255.00.
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