PRECIOUS METALS: NY Gold Lifted By Technicals, Crude's Bounce

Gold futures extended their recent life-of-contract highs late in Monday's session as more fund buying emerged when crude oil recovered from its early weakness and technical buying occurred, traders and analysts said.

Initially, gold had been pressured slightly by morning losses in crude, combined with weak equities and a modest uptick in the U.S. dollar, they said.

December gold rose $2.30 to $810.80 an ounce on the Comex division of the New York Mercantile Exchange. As pit trade was closing, the December contract at the Chicago Board of Trade was up $1.10 to $810.40.

Comex December silver rose 18.6 cents to $14.785. Shortly after it closed, CBOT December silver was up 15.2 cents to $14.748.

Comex December gold hit a contract high of $814.20 early in the afternoon after previously hitting a low for the day of $803.50. Much of the catalyst behind the late-day surge was December crude oil recovering from a $93.72 low to trade as high as $96.12 late in the morning. The oil contract was at $95.40 a barrel as gold closed, a loss of 53 cents for the day.

"Crude oil turned positive (for a while)," said a Comex floor trader. "And there is still some fund buying in the gold."

There were limited buy stops, particularly since there are not many traders short at the moment placing protective stops above the market, he added.

Nevertheless, some buy stops were touched off, reported Charles Nedoss, senior account manager and metals analyst with Peak Trading Group.

"You saw crude come off of its bottom and you saw the dollar pull back a little bit off from its highs," he said of the impetus that helped gold bounce. "But I think ... was crude and good technical buying coming in."

Technically, Nedoss pointed out, the pit-session low of $805 held above the overnight electronic low of $803.50.

Meanwhile, the pit session had an opening range in the $807.50 area, whereas the overnight session's opening range was around $810. 50. Thus, he said, some technical buying occurred around the $807.50 area when it appeared the pit low would remain above the overnight low.

"And once we took out $810.50, we picked up stops," he said. "I think you're seeing people add to positions and seeing people willing to buy breaks, especially with gold's inability to take out $800 (on the pullback)."

Silver largely followed gold higher, he said. December silver hit a $14.88 high that was its strongest level since Feb. 27, when it was last above $15 an ounce.

Meanwhile, January platinum rose $3.80 to $1,466.50 an ounce.

"Platinum is tracking gold right now," said one desk trader, although he described activity in the white metal as light. Some support may be continuing to come from concern about a potential strike in South Africa in response to recent fatal mining accidents, although he pointed out this has been factored into the market for a few weeks now.

January platinum inched fractionally above last week's $1,474.90 peak to a contract high of $1,475, although this is a double-top at the moment.

Meanwhile, December palladium declined $2.30 to $375.10 an ounce in a market that the trader described as largely range-bound.