US gold futures posted fresh three-month lows at the close Friday, pressured by light-volume speculative liquidation after Thursday's steep dive, as the dollar extended gains against major rivals, dealers said. June delivery gold on the New York Mercantile Exchange's COMEX division fell $1.50 to $420.70 an ounce, its lowest close since February 9, after trading from $423 to $419.30. "The dollar looks like it wants to go a great deal higher and there is fund selling across the metals," said Leonard Kaplan, president of Prospector Asset Management. A robust dollar tends to depress US currency alternatives such as gold.
Recent selling in gold was fuelled by declining COMEX open interest, as well as redemptions in exchange-traded funds, which had to be matched with a corresponding amount of bullion sales, and crude oil slipping from its highs, analysts said.
The level of participation in gold futures trading has taken a tumble since open interest hit an all-time high above 330,000 lots late last year.
But, ongoing physical bargain hunting at cheaper prices was propping up gold, despite the further currency-related selling seen late this week, said analysts at TheBullionDesk.com.
"Next week is looking set to be another busy one with a careful eye kept on the currencies and their reaction to the week's data releases" including US net capital inflows and inflationary PPI and CPI data, they said in a report.
Estimated final trading volume in COMEX gold futures was a moderate 61,000 lots against Thursday's official 97,212 lots.
Open interest slid 487 lots to 278,123 lots as of May 12.
The dollar scaled a seven-month peak against the euro and hit three-month highs versus the Swiss franc and sterling after recent robust data raised optimism about the US economy.
Analysts saw gold supported at $420 and then at $414, $400 and then $380. Resistance was pegged at levels up to $450.
Spot gold changed hands at $420.00/420.80 an ounce, versus Thursday's late quote in New York at $421.75/2.50. Friday's afternoon London fix was at $420.
In other precious metals, platinum sank to a two-week nadir and palladium struck its lowest level since early March.
NYMEX July platinum shed $6.20 to finish at $865.40 an ounce - its lowest close since April 29. Profit taking has weighed down platinum group metals ahead of British refiner Johnson Matthey's Monday report on platinum supply/demand conditions. Spot platinum changed hands at $863/867.