Gold futures rose to within sight of 17-year highs early Wednesday on safe-haven buying, but gains were capped by scattered profit taking linked to technical factors and the Federal Reserve's latest interest rate hike, dealers and analysts said. By 10:29 am EDT, December delivery gold on the New York Mercantile Exchange's COMEX division was up $2.50 at $472.50 an ounce, trading between $467.40 and $473.50.
Prices hovered within range of Tuesday's contract high of $474.90 an ounce, the strongest level for a benchmark futures contract since January 1988, as uncertainty about energy prices, currencies and US economic growth fuelled broad interest in gold, traders said.
But the market appeared more cautious now with technical resistance viewed at the psychological $475 area.
"It has become over-saturated with bullish enthusiasm," said George Nickas, vice president of sales at FC Stone in New York. "The market is pausing, but I don't think we'll see a pullback today."
Open interest rose more than 11,000 contracts to reach around 359,000 lots. The record high for COMEX gold open interest is 370,786 contracts, reached on November 22, 2004, an exchange spokeswoman said.
Fundamentally in gold, strong bullion demand, particularly from India, lower global mine production of late and fewer sales from central bank reserves were supportive to prices.
Bullion neared Tuesday's high at $470.70 an ounce, which was its priciest level since January 1988. Spot gold last fetched $468.40/469.10, above Tuesday's New York close at $465.90/6.60. The afternoon fix in London on Wednesday was at $469.10.
COMEX December silver rose 1.5 cents to $7.39 an ounce, moving from $7.32-7.43. Spot silver inched to $7.32/35 vs. $7.31/34 late on Tuesday. The fix was $7.2850.
On the board at NYMEX, October platinum rose 70 cents to $934.50 an ounce. The market hit an eight-month high earlier this week. Spot traded at $927/931.
December palladium dropped from this week's five-month high to $199 an ounce, off $3.55. Spot was at $195/198.