Gold futures closed down slightly in New York on Friday, below a fresh 18-year high hit overnight, as traders awaited the next move from bullish funds and investors, traders and analysts said.
The market paused after a speculative rally that has hoisted gold up by 4.3 percent since the end of last week on expectations that it could soon touch $500 an ounce.
"The market is still looking strong," said George Nickers, vice president of sales at FC Stone in New York. "Fundamentally, it hasn't changed."
Nickers said gold ran out of steam near, after trading in metals and petroleum at the New York Mercantile Exchange was shut for half an hour by a computer glitch.
"It was poor timing that it happened on a Friday in the middle of the day, but gold should rise next week," he said. Benchmark December futures shot to a life-of-contract high at $489.60 an ounce in off-hours Nymex ACCESS electronic trading, which marked the highest for futures since January 1988.
It closed down 70 cents at $486.20 an ounce, still above a session low of $484.30. The Comex gold price has climbed more than 13 percent this year on heightened concerns about the US economy and geopolitics and on general commodity strength.
"I don't think we ran out of gas. We were up $20 in two days, we were due for a pullback," one Comex floor trader said. Although chart resistance lurks at $490, some market-watchers said gold can hit $500, a price last seen in December 1987, by the end of 2005.
Analysts have said the market has been supported by comments by Russian authorities indicating that the central bank might double its bullion reserves and seek another 500 tonnes.
Sentiment was also sweetened by a demand report from the industry-backed World Gold Council on Thursday showing a seventh straight quarterly rise, bolstered by strong investment interest, analysts said.
Much of the volume was from rollover into February futures from December gold before delivery period begins next month. Volume just before the close was brisk 102,000 contracts, with 15,318 switches.
Spot gold also hit a new 18-year peak, at $488.70 an ounce. It edged to $485.40/486.20 an ounce, compared with Thursday's New York close at $485.90/6.60.
On Friday's afternoon fix in London was at $485.85. "The trend for gold remains steady, with funds and market participants seemingly convinced that prices would be higher by the year's end or next year, with targets marked between $500 and $525," Standard Bank said in a note Comex December silver closed down 3.5 cents at $8.067 an ounce, after dealing from $8.035 to $8.18 its highest level since December 2004. Next resistance was seen at $8.19 and $8.215, with support at $8.00.
Spot silver fetched $8.04/06 an ounce, against its 11-month high of $8.15 and the prior New York close at $8.07/09.
On Friday's fix was at $8.11 an ounce. "Having crossed and holding well above the $8 level so far, and with a lack of sizeable selling interests materialising, the metal could be well-positioned to test toward $8.25 with the general commodity bullishness," said Standard Bank.
Nymex January platinum firmed as it consolidated for a second day below on Thursday's near-26-year high of $1,000 an ounce. It closed up $3.70 at $986.10 an ounce, trading from $977 to $992.90.
Spot platinum was at $979/982 an ounce. December palladium rose $4.90 to $267 an ounce, settling just shy of an 18-month peak at $267.90. Spot fetched $261/265.
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