Gold futures rose in early New York trade on Thursday, revved up by a weak dollar to extend their rally but balking at challenging last week's highs. At 10:31 am EDT (1431 GMT) the December gold contract on the Comex division of the New York Mercantile Exchange was up $1.30 at $736.80 an ounce.
It rose from $733.90 in overnight screen trade to $743.00 just after pit trade opened, putting it in striking distance of Friday's 28-year high of $747.10. "We've had such a great move that it's consolidating, most probably. The weakness in the dollar and strength in crude possibly could make that move," said Jonathan Jossen, an independent Comex floor trader.
The euro reached a new high of $1.4189 as the greenback lost more ground on expectations that the Federal Reserve would continue lowering US interest rates to deal with the mortgage crisis and the slowdown in the economy.
Gold trimmed its gains as the dollar firmed slightly after the Commerce Department reported midmorning that US single family home sales fell 8.3 percent in August, to the lowest rate since June 2000.
The numbers were worse than economists had predicted but not as bad as the direst expectations built into the market before the release. "I heard the rumours this morning. They said it was going to be a disaster," said a bullion trader, adding that the market was relieved when it came in the middle of the range. "If the dollar keeps going, we'll keep going," he said.
Gold bullion was at $730.90/0.40, up from the New York close at $728.10/8.90. London bullion dealers fixed the afternoon spot reference price at $731.75 an ounce.
NYMEX January platinum was up 70 cents at $1,361.20 after reaching a contract high of $1,366.10. Spot platinum was quoted at $1,348.00/1,352.00. December palladium was up $1.65 at $346.45 an ounce. Spot palladium was quoted at $341.00/345.00. Comex December silver was 5.0 cents firmer at $13.595 an ounce, trading between $13.48 and $13.73. Spot silver rose to $13.46/51 from $13.35/40 at the close. London silver was fixed at $13.51 per ounce.