US gold up on weak dollar, interest rate in focus

U.S. gold futures turned
higher on Thursday as the dollar dropped, but rising Treasury
yields could dampen the investment appeal of
noninterest-bearing gold, traders said.
For the latest detailed report, click on [GOL/].
GOLD
* August GCQ9 up $1.10 at $955.80 an ounce at 10:41 a.m.
EDT (1441 GMT)on the COMEX division of the New York Mercantile
Exchange.
* Ranged from $942.50 to $959.10.
* Gold reversed initial losses as the euro rose above $1.40
against the dollar, boosting the metal's appeal as a hedge
against the falling U.S. currency.
* Gold buying, however, has been under pressure as
benchmark 10-year U.S. Treasury yields had risen to their
highest levels in eight months amid concerns about the
increasing U.S. budget deficit and the government's borrowing
ability in the long term - traders. [ID:nN11335223]
* Rising Treasury yields and high interest rates are
negative for gold and other investments perceived as riskier,
because of the higher opportunity costs of owning them.
* Sellers reappear as higher long-term U.S. rates make gold
future spreads more expensive and prompt traders to look for
other investment opportunities - George Gero, vice president of
RBC Capital Markets Global Futures.
* Weak gold jewelry demand amid poor retail sales hurt
prices, and open interest in gold is expected to drop further -
Gero.
* Gold import from top buyer India dropped 39 percent from
a year ago - Bombay Bullion Association. [ID:nBOM132429]
* Simmering geopolitical tensions in the Middle East and
the Korean peninsular, inflation worries and a first influenza
pandemic in 40 years provided background support to gold as a
safe haven - traders.
* COMEX estimated 10 a.m. volume at 63,656 lots.
* Gold/oil ratio at 13.20, lower than the 13.40 of the
previous session.
* Spot gold traded at $954.80, up 0.1 percent from
its previous session.
* London gold fix at $947.50 an ounce.
SILVER
* July SIN9 up 12.5 cents at $15.350 an ounce, tracking
gold's direction.
* Ranged from $14.925 to $15.390.
* COMEX estimated 10 a.m. volume at 21,882 lots.
* Spot silver was at $15.34 an ounce, up 1.3 percent
from its previous finish.
* London silver fix at $15.090 an ounce.
PLATINUM
* July PLN9 down $5.10 at $1,268.10 an ounce on light
profit-taking after the previous session's gains.
* Chinese buying of platinum in the past six months has
been the most supportive factor in the market, and demand
growth from the jewelry industry compensated for a slowdown in
purchases from industrial users - UBS Investment Bank.
* The global car industry accounts for 60 percent of total
platinum demand for use in automobile catalytic converters.
* Spot platinum at $1,262.50 an ounce, up 0.1
percent from its previous session.
PALLADIUM
* September PAU9 up 25 cents at $259 an ounce on
investment buying.
* Spot palladium was at $255.50 an ounce, up 1
percent from its previous finish.
Prices at 10:41 a.m. EDT (1441 GMT)
Last Change Pct 2008 YTD
Chg Close % Chg
US gold GCQ9 955.80 1.10 0.1 884.30 8.1
US silver SIN9 15.350 0.125 0.8 11.295 35.9
US platinum PLN9 1268.10 -5.10 -0.4 941.50 34.7
US palladium PAU9 259.00 0.25 0.1 188.70 37.3
Gold 954.80 1.15 0.1 878.200 8.7
Silver 15.34 0.19 1.3 11.30 35.8
Platinum 1262.50 1.50 0.1 924.50 36.6
Palladium 255.50 2.50 1.0 184.50 38.5
Gold Fix 947.50 -6.25 -0.7 836.50 13.3
Silver Fix 15.090 -0.300 -1.9 14.760 2.2
Platinum Fix 1267.00 0.00 0.0 1529.00 -17.1
Palladium Fix 261.50 0.00 0.0 365.00 -28.4
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Prices in dollars per ounce.
2008 close for U.S. gold second contract month, U.S. silver and
palladium third contract months and U.S. platinum fourth
contract month.