US gold futures settled flat on Tuesday in choppy, currency-based activity as the market was reluctant to make bold moves before two days of testimony from Federal Reserve Chairman Alan Greenspan, dealers said. Silver showed that it's recent rally still had some strength as prices ended at two-month highs, but platinum fell sharply. "A wild day today," said Leonard Kaplan, president at Prospector Asset Management, who cited gyrations in the currencies as the dominant feature in the session.
"Everyone in the market is waiting for Alan (Greenspan) to talk tomorrow," he added.
Benchmark April delivery gold finished steady at $427.30 an ounce on the New York Mercantile Exchange's Comex division, after trading between $425 and $428.70 its highest mark since January 31.
Profit taking and a whippy dollar combined to cap a broad-based, 3-day rally in the precious metals after prices last week bounced from oversold levels, floor traders said. Market participants also opted not to take on big positions in the dollar-sensitive metals, as Greenspan was preparing to speak before Congress on Wednesday and Thursday.
"I think what he's going to talk about is the Fed will continue to raise rates," said Kaplan. "If he does, then the dollar gets supported and gold goes lower." A stronger US currency makes dollar-denominated precious metals more expensive for traders holding foreign money.
Technically, gold needed to break above significant resistance between $428 and $430, Kaplan added.
"If it gets over $430, we could run a bit, but we'll have to see." As to support, brokers have pegged key levels in gold at $425-424, and then at $422-418. Spot gold priced at $425.50/426.20 an ounce, up from $425.25/6.00 at Monday's New York close.
London's afternoon fix was at $424.40. The euro stuck near $1.3010, up from $1.2969 late on Monday.
On the economic side of the ledger, net inflows of capital into US assets in December slid to $61.3 billion near expectations and enough to finance the nation's current account deficit that month.
Separately, US retail sales dipped 0.3 percent in January as auto sales tumbled, but purchases outside the car sector gained a healthy 0.6 percent.
Silver's rally slowed after prices gained more than 75 cents in a three-day bounce from support near $6.50 an ounce. March silver rose 2.0 cents to conclude at $7.36 an ounce, trading from $7.405 to $7.21.
Spot was at $7.32/35, versus $7.31/34 late on Monday. The fix was flat at $7.245. Support in silver was seen at $7.09, $6.89 and $6.75/80, with resistance at $7.35/40 and $7.50/60 and then $8.235.
Speculative selling hit platinum after a report by refiner Johnson Matthey forecast the global market moving toward surplus this year, despite firm demand. Nymex April platinum dropped $22.20 to $852.90 an ounce.
Spot fetched $850/854. March palladium was down $2.80 to $185.35 an ounce. Spot was worth $180/184.
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