Gold futures ended a touch higher in choppy trade on Monday, erasing losses on improved investment interest as traders deciphered the debut of Comex metals contracts on the Globex electronic platform.
February gold at the Comex division of the New York Mercantile Exchange finished up 30 cents at $650.90 per ounce, after falling as low as $645.70 in the session. "As we started the week here, there was certainly a bullish (sentiment) going to the market place," said Paul McLeod, vice president of precious metals at Commerzbank.
He added that the market was poised to go higher, although some profit taking might be seen at $650. "The market's slightly directional, probably because oil is down and dollar's weakened a bit," said Auramet Tracing's Bruce Dun.
The dollar edged up against most major currencies as investors took profit following a dollar decline that have shaved some 3 percent off its value in less than two weeks. Coming into the week, the dollar had tumbled to a 20-month low versus the euro and a 14-year trough against sterling as weak data fanned fears US interest rates could soon fall even as euro zone and UK rates were headed higher.
Dun said that gold was running into some resistance again between $648 and $650 and the metal might be undergoing consolidation. Estimated Comex volume was 25,000 contracts, and options turnover was 15,000. Turnover in the Chicago Board of Trade's electronically traded 100-oz gold contract was 37,684 contracts as of 4:01 pm EST (2101 GMT) (http://www.cbot.com/cbot/pub/page/0,3181,297,00.html).
Beginning on Sunday night, the Nymex started to offer Comex contracts electronically through the Chicago Mercantile Exchange's Globes system. The new Comex electronic contracts were trading on CME Globes during open-outcry hours.
York Commodities' Edward Daly said that the volume on the Comex floor was "just dead" in sessions and the migration of Comex contracts had added a level of uncertainty for traders.
"It's going to be a little bit difficult here today. We are watching the electronic platform today. I think a lot of minds are on the electronic platform," said one floor trader. Commerzbank's McLeod said the launch of Comex futures on CME Globes could lower volume a little because people were adapting to the new approach.
"It's a positive development for the market. The additional liquidity brought online will help the marketplace," McLeod said. The market now awaits the release of November US unemployment rate and nonfarm payrolls, due 8:30 am EST (1330 GMT) on Friday.
Spot gold bullion was last quoted at $645.40/646.40 compared with $645.20/$646.20 in late trade on Friday. Bullion dealers fixed London's afternoon spot reference price at $646.00. Nymex March silver climbed 5.5 cents to close at $14.245 an ounce. Spot silver was quoted at $14.08/4.15, up from Friday's late quote at $13.980/14.050.
On Monday's fix was $14.050. Nymex January platinum rose $5.50 to $1,160.0 an ounce. Spot platinum fetched $1,154.00/1,159.00. Nymex March palladium ended up $3.70 at $336.45 an ounce. Spot palladium traded at $326/332.
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