US gold higher

Rising crude oil prices, concerns about a slowing economy and ongoing geopolitical tensions drove US gold futures to a higher finish on Wednesday, and analysts said they remained bullish on the precious metal's outlook. Most-active gold futures for April delivery on the Comex division of the New York Mercantile Exchange settled up $4.30 at $666.80 an ounce.
They traded between $663.30 and $669.80, a session high in electronic trading. Bill O'Neill at LOGIC advisors said that gold had a day of many concerns, including a frenzy in the oil market in overnight trade, uncertainties surrounding Federal Reserve Chairman Ben Banana's remarks on the economy and weak equities markets.
Oil was up by more than $1 after rumours, quickly dismissed by the United States and United Kingdom, of a US naval clash with Iran, and that Britain had sent troops to release 15 British sailors and Marines being held by Iran.
The rumours helped push US crude up around 8 percent to $68 per barrel late on Tuesday before prices retreated. O'Neill, however, contended that some of the worries were "very exaggerated." "If the market is rallying on Iran, I think that is not going to be a lasting factor.
Because I firmly believe that the Iran situation will be resolved diplomatically, and I think that there will be no interruption in oil supply," O'Neill said. Comex estimated final exchange floor volume at 50,000 lots and options turnover at 18,000. Turnover in the Chicago Board of Trade's electronically traded 100-oz gold contract was 42,794 lots as of 2:31 pm EDT (1831 GMT). (http://www.cbot.com/cbot/pub/page/) Joseph Gizzards at Saibu Commodities said that gold prices were following crude oil, basically tick to tick, because of the Iran situation. "I think, if it wasn't for the crude, we would be trading a little bit lower here by now," he said. The dollar slumped against the yen on Wednesday, in line with weakness in the US stock market, after Bernanke suggested a slowing housing market has clouded the US economic outlook. The US currency gained against the euro.
On Tuesday was also the options expiration day for April gold, while the first notice day for the April contract on Friday, and investors needed to decide whether to roll April futures into the June contracts, creating additional buzz in the market.
June gold futures will become the most-active contracts on Thursday. "I think once option expiration and Bernanke are out the way, we should start to see gold make a more convincing move higher, potentially targeting the so far elusive $700 (spot) mark, once we move into the second quarter," James Moore, metals analyst at theBullionDesk.com, said in his daily research. Investors await personal income and US economic indicators due this week, including gross domestic product data on Thursday on Friday.
Traders said that the key economic gauges could influence gold futures. Spot gold was quoted at $666.10/6.66 an ounce, higher than the $662.90/3.90 quoted late on Tuesday. London's afternoon gold fix was $666.75. Silver tracked gold's gain. Comex may silver closed up 17.5 cents, or 1.3 percent, at $13.455 an ounce traded between $13.330 and $13.545.
Spot silver was quoted at $13.37/3.40, up from $13.25/3.28 late on Tuesday. The London silver fix was $13.360. Nymex April platinum ended up $8.80 at $1,250.80 an ounce. Spot platinum was quoted at $1,239.00/43.00. June palladium finished up $1.85 at $357.85 an ounce. Spot palladium was quoted at $351.00/55.00.