Gold and silver were rangebound on Thursday, the former failing to break resistance and the latter hovering below a 22-year high on hopes of a launch of a new US silver investment product, traders said.
Spot silver, which has risen more than 17 percent this year, was quoted at $10.22/10.25 an ounce at 1514 GMT, 9 cents below its New York close and further down from the 22-year high of $10.37 hit on Wednesday.
Silver soared that day when speculators bought the metal on expectations the US Securities and Exchange Commission would soon approve a proposed exchange-traded fund from Barclays Global Investors.
"Silver is all about expectation of EFT approval, there's nothing else to say about it. People will be buying on the dips," a trader said.
Another trader said earlier: "If it's approved it will have a $1 to $2 upward impact, and I see no reason why it wouldn't be approved."
ETFs are designed to reflect closely the price of an underlying market or commodity, such as a stock index or gold. They trade like listed stocks on any exchange.
Gold was rangebound after failing to exceed $556, and may fall in the short-term if it does not break resistance. "It's failed again at these higher levels, and if it carries on failing then it may turn around," a third trader said.
"The market on the whole is friendly to gold - if it goes below $550 it will touch $548, then it'll go back up. There will be buying on the dips." Gold is perceived by some investors as a safe investment whose value increases as the world becomes more dangerous.
"People are becoming more paranoid - there are political tensions in Iran, the bird flu - people are more scared than they were a few years ago, they feel the need for secure investment," the second trader said.
"Assets have for a couple of years been re-allocated into gold, now they are diversifying into other precious metals - this process is starting to take place, there is money from non-precious metals into precious."
Spot gold was quoted at $549.50/550.25 an ounce at 1517 GMT from $553.50/554.40 late in New York. It fixed in London at $552.75 in the afternoon and $553.25 in the morning.
Gold rose to a 1-week high of $556.90 on Wednesday as it tracked gains in silver, but remained below a 25-year high of $574.60 hit in early February.
Platinum was at $1,015 an ounce from New York's $1,024/1,028 an ounce. Sister metal palladium fell to $310/314 from $315.50/319.50.
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