US gold futures rebounded to finish higher on Monday, after a volatile week when the market sold off heavily on risk aversion, as investors looked for new impetus during the usually slower summer months. Platinum futures also steadied after on Friday's 3-percent drop on speculative sales and after news that Nissan developed a catalyst for cars that halved the use of precious metal components to clean tail-pipe emissions.
Most-active gold for December delivery on the Comex division of the New York Mercantile Exchange settled up $4.30 at $676.60 an ounce, dealing in a $5-range between $671.80 and $676.90.
A precious metal dealer in New York said that bullion would look for trading cues from the currency market, as a steadily weakening dollar had sent gold to rally $40 before the tumultuous sell-off began on Thursday. "We had such a volatile last few weeks, its going to be fairly quiet to start off the week at least," he said.
Dealers said that the switchover of gold futures on Monday was going well ahead of August gold contracts' first notice day on Tuesday. Investors have to decide whether to roll August contracts into the now-benchmark December futures, creating extra buzz in the marketplace.
On Thursday, August gold briefly touched a low of $652.80, which marked the weakest level since July 6. The August contract had lost as much as $35 since it hit a two-month high of $688.40 on Tuesday. The dollar fell against the euro and most currencies on Monday, as investors sold the greenback given fears of deteriorating credit markets.
US September crude futures closed down 19 cents at $76.83 a barrel but remained near its record front-month crude settlement of $77.03. Comex estimated final volume at modest 97,160 lots, including 15,581 switches, and gold options at 9,347. Turnover at Chicago Board of Trade's electronic 100-oz gold futures were 21,290 lots at 2:41 pm.
"The poor performance of gold during this wave of speculative excess is probably an indication of poor current gold market fundamentals relatively heavy central bank selling and seasonally weak physical demand," Read said.
However, Saudi Arabia gold sales rose almost 17 percent in volume and 25 percent in value in the second quarter of 2007, a senior World Gold Council official said on Saturday.
At 3:01 pm (1901 GMT), spot gold was quoted at $664.60/665.40 an ounce, compared with $661.40/662.20 late on Friday. The London afternoon gold fix was $661.50. In other metals, Nymex October platinum edged up 10 cents to close at $1,286.80 an ounce.
Spot platinum fetched $1,268/1,272 an ounce. September palladium ended up $3.60, or 1 percent, at $367.30 an ounce. Spot palladium was quoted at $360/364 an ounce. Angloplat, the world's biggest platinum producer, said interim profit jumped sharply but higher costs and a cut in forecast output due to labour and safety issues cast a shadow.
The firm, majority-owned by mining group Anglo American Plc, said full-year refined platinum production would come in at 2.6 million to 2.65 million ounces, down from a previous estimate of 2.8 million to 2.9 million ounces. Comex September silver finished up 18.8 cents, or 1.5 percent, at $12.903 an ounce, trading between $12.685 and $12.945. Spot silver was quoted at $12.85/12.90 an ounce, compared with $12.68/12.73 late on Thursday. London silver was fixed at $12.73.
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