COMEX gold ended higher Friday but was whipsawed by the dollar and mixed interpretations of data pointing to mounting inflation pressures, strong manufacturing growth and steady consumer confidence, dealers said.
June gold closed up $2.20 at $377.10 an ounce after trading between $377.90 and $373.20. Estimated volume was a light 38,000 lots.
Trading activity was unsettled after gold's initial rise and the dollar's fall, on the Labor Department's report that its Consumer Price Index for April rose 0.2 percent. Traders focused on core CPI, which excludes food and energy prices and which rose 0.3 percent, more than the 0.2 percent forecast by economists.
"It has been just a very choppy day. It got a lift early in morning off the data," said Tom Boustead, analyst at Refco Inc.
"Was it inflation worry that drove it higher? Or was it the headline being a little under (expectations) maybe taking some interest rate fears off?" he said. "You could actually read it either way."
Emotion was mixed for gold. One hand, it is seen as insurance against inflation and geopolitical tensions. On the other, the Federal Reserve is widely expected to raise interest rates this summer to prevent the economy from overheating, which would make gold, which carries no yield, less attractive than dollar deposits.
"Core CPI was greater than expected and was greater than the main CPI and that's what people are keying off of," said a metals futures broker, adding gold was being led around with "a chain in the nose" by the euro.
The dollar fell only to bounce briefly after the April US industrial output report showed a bigger-than-expected 0.8 percent rise.
The University of Michigan's preliminary May consumer sentiment index read 94.2, unchanged from May.
The euro was quoted late at $1.1884/89, up from $1.1810/16, a stronger euro makes dollar-priced gold more affordable to European investors. "It's that simple," said a bullion trader. "The markets are a little short and it's Friday."
Spot gold rose to $376.70/7.45 from the last close at $376.05/75. London's afternoon fix was at $376.50.
July silver rose 11.3 cents to $5.728 an ounce, trading from $5.75 to $5.56. Spot silver was last at $5.71/75, up from $5.60/64 last night. Bullion dealers fixed silver at $5.56.
NYMEX July platinum slipped 90 cents to $793.70 an ounce. Spot platinum last traded at $790.50/795.50. June palladium likewise lost 90 cents to end at $242.80 an ounce. Spot was last quoted at $238.50/244.50.
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