COMEX gold surged to a two-week high Friday morning as a weakening in the dollar prompted commodity funds to buy back short positions in precious metals.
Comments by Federal Reserve Governor Ben Bernanke suggesting the Fed would not rush to raise interest rates without being sure the job market is recovering and inflation is on the rise knocked the dollar to two-week lows against the euro and yen overnight, making gold cheaper overseas.
But gold outpaced currency gains, and dealers said dollar selling may have been accelerated by gold's jump.
June gold at 9:04 a.m. EDT was up $7.30 at $385.80, bottoming at $379.00 overnight before reaching $386.80, its highest price since May 7, in open outcry trade.
"We had some previous tops at $383.50/$384.00. It got above there and I suggest there were some stops up there," a floor broker said, referring to stop-loss buy orders.
Gold has been extremely volatile this week as the dollar seesawed and financial markets tried to guess whether the US central bank would raise rates at its June or August meeting.
Spot gold was quoted at $385.50/6.10, up from the close at $378.40/9.00 on Thursday. London bullion dealers fixed gold in the morning at $382.25.
July silver was up 13.0 cents at $5.91 an ounce, trading from $5.78 to $5.96. Spot silver was quoted at $5.89/93, up from $5.76/80. The silver fix was at $5.86.
NYMEX July platinum was up $8.10 at $811.00. Spot platinum fetched $806.00/811.00.
June palladium futures were up $8 at $248.00 an ounce. Spot was indicated at $245.00/250.00.
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