Gold futures in New York held on to initial gains early on Friday, after the previous session's heavy losses, as a weaker dollar and rising crude oil prices prompted bargain hunting. However, bullion dealers said the recent sharp fall in gold prices had not triggered a significant amount of physical buying.
Platinum futures also rebounded nearly 2 percent, after the world's biggest platinum producer slashed its output forecast for this year. "We've seen see some moderate to light physical buying in the past couple of days. The physical buying, although buyers are starting to show some interest, has not lived up to expectations, perhaps," said Andy Montano, a director at bullion dealer ScotiaMocatta in Toronto.
At 10:38 am EST (1538 GMT), most-active December gold on the COMEX division of the New York Mercantile Exchange trimmed initial gains but was still up $1.40 at $788.70 an ounce. It traded between $786.20 and $798.40. Jonathan Jossen, an independent COMEX floor trader in New York, said that selling by commodity funds was seen earlier, but gold futures climbed on the stronger euro and higher crude oil in quiet trade.
Jossen said the December contract must break above the critical resistance at $806.50 to see any material gains, and it must breach $819 to rise even further. Spot gold was quoted at $787.35/788.05 an ounce, compared with $785.80/786.60 in New York Thursday afternoon. London bullion dealers fixed the afternoon spot reference price at $789.75.
COMEX December silver was up 2.8 cents at $14.510 an ounce, trading between $14.365 and $14.745. Spot silver was quoted at $14.49/14.54 an ounce, compared with $14.35/14.40 late Thursday in New York. London silver was fixed at $14.45.
NYMEX January platinum was up $22.10 or 1.6 percent at $1,447.50 an ounce. Spot platinum was quoted at $1,446/1,451. December palladium declined $4.20 or 1.1 percent to $366.75 an ounce. Spot palladium was at $365/368.