Gold in New York edged to fresh six-week lows in quiet trade early on Friday as follow-through long liquidation pressured prices after a sell-off driven by softer crude oil and a steady dollar. Silver and platinum also declined, but prices appeared steadier by midmorning, while palladium rose in thin volume, dealers said.
At 10 am EDT, active August delivery gold futures was down $1.60 at $418.60 an ounce on the New York Mercantile Exchange's COMEX division, after trading as low as $418.20, which marked its weakest price since June 2.
Investment funds ditched more positions on the break below $420 an ounce, dealers said, while physical buying continued to be limited by summer vacations and less demand from India after the springtime wedding season.
One analyst said, however, that gold should not see a heavy sell-off, mainly because currencies are rangebound and still-high oil prices propped up gold as a hedge against inflation.
Spot gold inched to 418.40/419.10 an ounce, down from Thursday's late quote in New York at $419.70/0.40 and compared with that day's six-week low at $418.60. Friday's early fix in London was $419.60.
Gold shot to a 16-year high a few dollars below $460 an ounce in December amid the dollar's steep decline on concerns about US deficits, but this year rising interest rates have lifted the dollar and weighed on gold.
In platinum, traders saw prices probably drifting up from the one-week low hit earlier, unless the speculators begin to hammer on the palladium price. "It's been dead this week and we're just marking time. Nothing's going to happen because orders from the funds are very small," said one floor broker.
NYMEX October platinum slipped 90 cents to $864.50 an ounce but held above an earlier low at $862.20. Spot was down at $862/866.
September palladium rose $1.10 to $183.25 an ounce. Spot fetched $180/184. In silver, September futures shed 0.5 cent to stand at $6.99 an ounce, trading $7.02-$6.965.
Spot silver dipped to $6.94/97, from Thursday's New York closing quote at $6.95/98. The fix was at $6.965.
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