US MIDDAY: gold marginally up

Bargain hunters and a weakened dollar drove gold futures slightly higher early on Wednesday, after they fell in the two previous sessions, and the precious metal was seen set to retest levels above $690 an ounce, traders said.
At 9:23 am EDT (1323 GMT), most-active gold for June delivery on the COMEX division of the New York Mercantile Exchange was up $1.70 at $689.40 an ounce, trading from $685.80 to $690. James Quinn, commodity commentator at A.G. Edwards, said trading was quiet and a weaker dollar should underpin the metals markets. He added that light selling from independent traders could be seen.
"The market had broken the $690 area. I think we will probably try to retest it and head above it," Quinn said from the COMEX floor. Quinn said investors would look for cues from oil inventory data due at 10:30 am.
"If you get any kind of exaggerated moves in the oil market, you will likely see some sort of responses in the metals," he said. US crude futures climbed 43 cents to $65.01 a barrel in early trade. Gold is generally seen as a hedge against oil-led inflation.
James Moore, analyst at TheBullionDesk.com, said in a research note that bargain hunting in early European trade pushed prices higher, but fund and technical sell orders put gold under pressure at the opening of the US pit session.
"Options expiration this week may reduce the scale of selling above $690. However, with momentum indicators pointing lower, gold could face further technical selling, potentially triggering a test back to $676," Moore said.
Traders said Wednesday's expirations of COMEX May silver and gold options might keep the market from rising higher. Spot gold was quoted at $685.75/6.25 an ounce, above a late quote of $684.10/4.60 in New York on Tuesday. London's morning gold fix was $686.20.
In other precious metals, silver followed gold to trade higher. COMEX May silver was up 9.30 cents at $13.875 an ounce, trading from $13.730 to $13.885. Spot silver was quoted at $13.85/3.89, compared with $13.78/3.81 late Tuesday. Silver was fixed at $13.790 in London.
The platinum group metals rebounded after falling sharply on Tuesday. June palladium gained $3 to $382 an ounce. Spot palladium fetched $376.00/381.00. July platinum was up $5 at $1,316.50 an ounce. Spot platinum was quoted at $1,305.00/10.00.