US gold futures dropped on Friday as a dollar rise and a sharp drop of COMEX open interest took a toll on buying sentiment, signalling more unwinding of long positions, traders said. December down $5.00 at $733.50 an ounce on the COMEX division of the New York Mercantile Exchange at 10:37 am EDT (1437 GMT).
Futures traded in a relatively narrow range between a low of $721.80 an ounce and a peak of $742.50. Gold hurt when the dollar and yen gained ground as investors trimmed risky carry trades amid recession fears. COMEX open interest down sharply by 10,491 lots at 303,218 lots as of October 29.
The one-day drop of 10,000 contracts in open interest points to a possible poor year-end rollover to February contracts from December, according to RBC Capital Markets Global Futures Vice President George Gero. COMEX estimated 9 am volume at 31,613 lots, and options turnover at 121 lots. Spot gold was at $734 an ounce, 0.2 percent lower than Thursday's close of $735.50. Morning fix in London $728.50 per ounce.
December silver down 13.0 cents, or 1.3 percent, at $9.655 an ounce on gold's decline. Slightly weaker stock markets failed to support industrial metals, such as silver and copper. COMEX estimated 9 am volume at 5,928 lots. Spot silver at $9.63 an ounce, down 0.2 percent from Wednesday close of $9.66. London silver fixed at $9.28 an ounce.
NYMEX January platinum down $9.50, or 1.1 percent, at $821.10 an ounce. Recession worries hurt platinum, which is mostly seen as an industrial metal used for catalytic converters in cars. Spot platinum fetched $806.50 an ounce. December palladium rises $1.75 at $198.45 an ounce. Rises on bargain hunting after a recent sell-off. Spot palladium fetched $192.
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