US gold futures closed higher on Monday as a declining dollar and weaker global stock market made the "safe haven" metal more attractive for investors, dealers said. June delivery gold climbed $2.50 to $429.00 an ounce on the New York Mercantile Exchange's Comex division the highest close since last on Wednesday after moving in a range from $424.70 to $429.70. Gold often gets bumped higher when the US currency and equities are declining, as investors seek assets termed as good stores of value.
"As the dollar got really weak, the gold market rallied, but not much," said Leonard Kaplan, president of Prospector Asset Management.
"Trading was low in volume and the move was not that impressive. The resistance that we have at $430-$432 looks impenetrable," he said.
The Dow Jones industrial average fell further after closing on Friday at 5-1/2-month lows, due to disappointing company earnings and worries about the economy.
It was off 0.21 percent at 10,066. The euro raced up on dollar long liquidation to stand at $1.3022. Now, gold market players await reports on US producer and consumer prices, due on Tuesday and Wednesday, for any signs of building inflation pressure.
Such data could raise chances for more aggressive US interest rate increases. Rising rates boost the dollar and pressure gold. Tim Evans, analyst at IFR Markets, said the gold market looked vulnerable to technical selling because investment funds appeared to be fully extended on the long side in futures.
Commitments of Traders data from the Commodity Futures Trading Commission showed the net fund net long position grew to 113,344 contracts as of April 12, from 106,264 on April 5.
Evans pegged resistance, basis Comex June, at $432.40 and $450.80, with support at $423.50 and $414.
Spot gold last priced at $426.90/7.70 an ounce, against on Friday's New York close at $424.60/5.40.
On Monday's afternoon fix in London was $425.75. Last weekend, finance ministers from the world's richest nations failed to agree at a meeting in Washington on how to help Third World countries write off crippling debt.
A Group of Seven statement on Saturday went no further than thanking the IMF for a study on how its gold reserves could be used to fund debt relief and promising more discussion.
However, Britain's Gordon Brown, who has made easing Africa's plight a personal crusade, predicted an agreement by the time G7 leaders meet in July in Scotland.
The fix was $7.045. Nymex July platinum fell $3.10 to $861.50 an ounce.
Spot platinum was stable at $860/865. June palladium gained 85 cents to end at $200.40 an ounce.
Spot palladium was quoted at $198/201.
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