US gold futures dropped below $1,130 an ounce early on Thursday on profit-taking following the previous sessions' gains, but strong underlying investment demand should limit losses. COMEX April gold down $13.80, or 1.2 percent, at $1,129.50 an ounce at 10:36 am EST (1536 GMT). Ranged from $1,125.90 to $1,142.30.
Dollar bounce prompts bullion investors to take profits following rally earlier this week. Euro falls against greenback as European Central Bank reinforces view that interest rates will remain low. Gold prices pressured by lower physical demand after Chinese new year, banks' price target downgrades, said RBS. Underlying support seen as SPDR Gold Trust posted inflow for second consecutive day.
Comex estimated 10 am volume at 66,547 contracts. Spot gold at $1,128.10, compared with $1,139.35 late in New York in the previous session. May silver down 16.9 cents at $17.160 an ounce, taking the lead from weaker gold. Range $17.055 to $17.395. COMEX estimated 10 am volume at 14,798 contracts. Spot silver at $17.13 an ounce, compared with the previous session's $17.17 late quote in New York. April platinum down $7.60 at $1,575.90 an ounce on broad industrial metal weakness. Spot platinum at $1,568 an ounce. June palladium up $4.95, or 1.1 percent, at $455.45 an ounce on investment demand. Spot palladium at $451 an ounce.