Oct 27, 2004
Yahoo Business News
NEW YORK, Oct 27 (Reuters) - Gold futures firmed on Wednesday morning, as safeguards such as precious metals were in vogue due to the weak dollar, record high oil prices and tensions over the U.S. presidential election next week, dealers said.
Gold for December delivery (GCZ4: Quote, Profile, Research) at the New York Mercantile Exchange's COMEX division climbed $2.30 to $429.90 an ounce by midmorning, erasing Tuesday's $2.30 decline, within a session range of $426.10 and $430.
"This is off the euro and oil concerns, and I think there is some flight-to-quality interest ahead of the election," James Quinn, AG Edwards & Sons commodity commentator, said from the floor of the COMEX.
The euro firmed to within 2 cents of record lows versus the dollar as mixed U.S. economic data and jitters surrounding the Nov. 2 presidential contest, as well as concerns over the U.S. current account deficit, weighed on the dollar.
Investors often turn to gold as a "safe haven" when other markets are in turmoil. Also, a soft dollar makes dollar-denominated metals cheaper for overseas buyers.
"The dollar is under some pressure," said a floor broker. "If they've been selling anything in here today, it's been silver and not gold," he added.
Key resistance in December gold was pegged at $433 and then at $436.50, the peak set by the active contract back in April, while key support rested at $423.
U.S. September durable goods orders rose by a smaller-than-expected 0.2 percent. That news had little immediate effect on the dollar as markets mainly awaited third-quarter U.S. gross domestic product data due out Friday, said analysts.
The euro traded up at $1.2782 (EUR=: Quote, Profile, Research) , down from Tuesday's peak at $1.2841. U.S. crude oil was quoted at up 5 cents at $55.22 a barrel, near its recent all-time highs.
Record energy prices and resilience in the prices of grains, livestock and metals lifted the Reuters CRB Index of 17 commodity futures to its highest level in nearly 24 years on Wednesday.
The benchmark CRB index, widely watched by investors and economists as a barometer of inflation and demand for raw materials, hit 288.84, clearing the previous 23-year high set on Oct. 11.
Spot gold (XAU=: Quote, Profile, Research) hit $428.15/8.90, up from the prior New York close at $426.05/6.80. Wednesday's early London fix was $425.85. London over-the-counter options were due to expire Wednesday but activity was subdued.
December silver (SIZ4: Quote, Profile, Research) was up 7.0 cents at $7.41 an ounce, in a range of $7.28 to $7.445. Spot silver (XAG=: Quote, Profile, Research) fetched $7.37/40, from $7.29/32 previously. It fixed at $7.32
January platinum (PLV4: Quote, Profile, Research) rose 60 cents to $845.50 an ounce. Spot platinum (XPT=: Quote, Profile, Research) changed hands at $842.00/846.00.
December palladium (PAU4: Quote, Profile, Research) traded at $216 an ounce, up 90 cents. Spot palladium (XPD=: Quote, Profile, Research) touched $213.00/218.00.
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