US gold up

US gold futures erased gains to finish up just 50 cents on Friday, capping a volatile week, lifted by a weaker dollar and inflation worries on higher oil prices and a bullish report on agricultural commodities.
Position squaring was seen ahead of the Independence Day holiday in the US markets next week, but prices were supported by news that a car bomb was defused in London, which refreshed worries about security, traders said. Joseph Gizzards at Saibu Commodities said from the Comex floor that gold's rise was a knee-jerk type rally to a sell-out earlier this week, which he said was overdone.
Most-active gold for August delivery on the Comex division of the New York Mercantile Exchange settled up 50 cents at $650.90 an ounce, after dealing between $648.80 and $655.00.
Gizzards cited a combination of bullish factors boosting gold, including higher energy prices and a weaker dollar. He said that gold should return to the $665 area in the near term. US oil futures ended up more than $1 at $70.68 a barrel. Gold is generally seen as a hedge against inflation. George Nickas at FC Stone in New York said that a bullish acreage report by the US Agriculture Department could extend support to metals prices.
The US Agriculture Department, in its June acreage report, said American farmers planted sharply lower-than-expected acres for soyabeans this spring. Prices of soyabean and soyameal soared. Cotton plantings were also estimated at an 18-year low. Nickas also said that the liquidation pressure from gold exchange-traded funds (ETF) in the week had run its course.
Data showed that holdings in streetcar's Gold Shares, the largest gold ETF, dropped just over 11 tonnes to 463 tonnes on Wednesday. It reported 464.37 tons of bullion holdings as of Friday.
Earlier this week, worries about the credit markets prompted jittery investors to sell precious metals and liquidate holdings in bullion ETFs. September silver had tumbled as much as 7 percent this week before on Thursday's rebound, while gold had also slumped as much 2.4 percent. Comex estimated final volume at a modest 50,706 lots, and gold options at 5,088.
Turnover at Chicago Board of Trade's electronic 100-oz gold futures was 14,518 lots at 3:01 pm EDT (1901 GMT) On Thursday, the Federal Reserve in its post-policy-setting meeting statement dropped the word "elevated" from its description of core inflation.
It also held the benchmark US interest rates steady at 5.25 percent. James Steel, analyst at HSBC, said in a note to clients that the Fed statement reaffirmed inflationary concerns. He said that the Fed.'s tightening bias appeared to remain intact, and if that persisted, it would be at least moderately bearish for gold prices. Spot gold rose to $648.70/$650.20 an ounce, compared with $647.90/$649.40 an ounce late on Thursday.
The London afternoon gold fix was set at $650.50. Comex September silver closed down 3.2 cents at $12.473 an ounce, dealing between $12.355 and $12.675. Spot silver was quoted at $12.36/12.41 an ounce, above the late on Thursday quote of $12.41/12.46. London silver was fixed at $12.540 an ounce. Nymex October platinum closed up 50 cents at $1,286.50 an ounce. Spot platinum traded at $1,270/1,274 an ounce. September palladium edged down 20 cents to end at $368.50 an ounce. Spot palladium fetched $362.50/366.50.