Gold futures in New York held steady early on Friday but below a new 18-year high hit overnight, as traders awaited the next move from bullish funds and investors, traders and analysts said.
Prices were edging up again by midmorning, after a brief foray lower, but players felt that the rally that has hoisted gold up by 4.3 percent since late last week on expectations that it could soon touch $500 an ounce had cooled off a bit.
A COMEX floor dealer said trading was becalmed due to a lack of paper "buy" orders following a frenetic session on Thursday featuring very high volume.
COMEX gold has climbed more than 13 percent this year on general commodities strength and heightened concerns about the US economy and geopolitics. December delivery gold spiked to a life-of-contract high at $489.60 an ounce in off-hours ACCESS electronic trading at the New York Mercantile Exchange, which marked the highest for futures since January 1988.
By 10:50 am EST, the contract was up 60 cents at $487.50 an ounce, compared with a session low of $485.30.
"The funds have run this market up to almost stupid levels and now no one is buying," Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois, said earlier on Friday.
"The dollar is down but gold is not trading off of that. The market is quiet, so you are seeing a little bit of selling," he said.
Analysts have said that comments by Russian authorities indicating that the central bank might double its bullion reserves and seek another 500 tonnes lent support.
Estimated COMEX gold volume by 10 am was a busy 53,000 lots, swollen by contract rollover out of December futures into February gold.
Spot gold also hit a new 18-year high, at $488.50 an ounce. At last check, it fetched $485.50/486.30 an ounce, compared with Thursday's New York close at $485.90/6.60. Friday's morning fix in London was at $487.90.
In other precious metals, silver clinched an 11-month high on the back of strong gold and platinum firmed as it consolidates below a prior near 26-year high of $1,000 an ounce.
COMEX December silver was up 1.8 cents at $8.13 an ounce, dealing from $8.065 to $8.18 - its priciest level since December 2004. Next resistance lurked up at $8.19 and $8.215.
Spot silver fetched $8.11/8.13 an ounce vs. its earlier 11-month high of $8.15 and against $8.07/09 previously in New York. Friday's fix was at $8.11 an ounce.
NYMEX January platinum futures were up $1.60 at $984 an ounce, trading from $977 to $992.90. Spot was flat at $976/980 an ounce. December palladium rose $2.90 to $265 an ounce, shy of a 18-month peak at $265.25. Spot hit $259/263.
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