US gold futures traded higher early on Friday, extending the previous session's reversal from one-week lows, with a softer dollar and firmer oil prices lending support, dealers said.
Gold for August delivery advanced $1.60 to $655.80 an ounce by 10:19 am EDT (1419 GMT) on the New York Mercantile Exchange's COMEX division, dealing in a relatively tight range from $653.50 to $659.50. Jeffrey Christian, managing director of commodity research firm CPM Group, said he was seeing a normal reaction in prices after they were down the previous session.
"What you have seen in the market over the last few weeks is proprietary traders have come in the morning and tried to push gold below $650, tried to push silver below $13, and when they failed, they reversed their shorts and prices come back up," he said.
On Thursday, gold futures settled with moderate losses, after probing one-week lows at around the $650 level amid a stronger dollar and increases in longer-dated US interest rates. The euro climbed nearly 0.5 percent to $1.3458 Friday morning in New York, rebounding from an early low at $1.3383. Gold typically moves in opposition to the dollar as many investors use the metal as an alternative to the currency. US crude oil futures edged higher on Friday, bouncing off early lows, as markets watched for signs a general strike in Nigeria would begin to affect oil exports.
COMEX estimated gold volume by 9 am at 17,628. On the fundamental front, South Africa's Gold Fields Ltd said Friday workers had ended a strike that had started on June 6 at its mine in Venezuela.
Gold Fields, the world's fourth biggest gold producer, said its employees had returned to work at the Choco 10 mine, but production for the quarter was expected to be fall to 5,800 ounces from the previously advised 8,000 ounces. Spot gold edged up to $652.30/652.90 an ounce by 10:14 am, from $651.30/652.80 an ounce late Thursday.
The morning London fix was set at $652. COMEX July silver was up 1.5 cents at $13.105 an ounce, falling back from an earlier peak at $13.19. Spot silver was quoted at $13.07/13.11 an ounce, a shade below the late Thursday quote of $13.08/13.12.
London silver was fixed at $13.1550 an ounce. NYMEX July platinum rose $5 to $1,304 an ounce. Spot platinum was at $1,294/1,291 an ounce. September palladium edged up 65 cents to $380 an ounce. Spot palladium was at $372.50/377.50.
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