US gold futures dropped 1 percent Friday morning as investors locked in solid profits from the past several sessions, and higher crude oil prices and geopolitical tensions kept the precious metal from falling further.
At 10:36 am EDT (1436 GMT), most-active gold futures for April delivery on the COMEX division of the New York Mercantile Exchange were down $6.20 at $658.20 an ounce, trading from $657.10 to $665.30.
A New York precious metal broker said gold was consolidating after its recent rally as investors took a breather and as the dollar strengthened. "Even though crude is up, gold can't seem to quite make it back to the unchanged level," he said.
Oil rose above $62 per barrel to a three-month high Friday after Iran seized 15 British Royal Navy personnel, raising concerns about renewed tension between the oil-producing nation and the West against the backdrop of the Islamic republic's nuclear dispute with the West.
"You would have thought that might have helped (gold) a bit more, and that might be why crude was up. But I don't think at this point it was enough of a story to move things dramatically higher," the broker said.
The dollar rose modestly after data showed US existing home sales rose in February, beating expectations for a decline from the previous month. Paul McLeod, vice president of precious metals at Commerzbank, said gold was fairly well priced in the short run because of its correction in prices with the equities markets last week due to subprime mortgage worries.
"It's had a nice, steady, consistent climb from that fall. I think now we are just getting to a technical resistance point that it might take a little more for us to push on through that," McLeod said. Also, first notice day for April gold will be next Friday, and investors needed to decide whether to roll April futures into the June contracts, creating additional buzz in the market.
Spot gold was quoted at $657.10/7.85, down from $664.60/5.60 an ounce quoted late Thursday. London's morning gold fix was $662.15. COMEX May silver was down 21.5 cents or 1.6 percent at $13.265 an ounce, trading between $13.255 and $13.500. Spot silver fell to $13.20/3.23 from $13.41/3.46 late Thursday.
The London silver fix was $13.370. NYMEX April platinum was down $9.00 at $1,232.00 an ounce. Spot platinum was quoted at $1,233.00/38.00. June palladium dropped $2.50 to $355.25 an ounce. Spot palladium was quoted at $353.00/58.00.
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