U.S. gold jumps 1 pct on weak dollar, fund buying

NEW YORK, May 4 (Reuters) - U.S. gold futures rallied 1 percent early on Friday on solid gains in the previous session, boosted by a weaker dollar and robust buying by funds, and prices are now within sight to test the $700 psychological level again.
At 10:06 a.m. EDT (1406 GMT), most-active gold for June delivery on the COMEX division of the New York Mercantile Exchange was up $6.60 at $691 an ounce, trading in a range of $682.60 to $692.20.
Jonathan Jossen, an independent trader, said from the COMEX floor that gold jumped largely because of a reversal of the dollar against the other major currencies.
"I think we are just catching up to where we should have been," Jossen said. He also cited strength in copper, silver and crude oil as well as higher open interest in gold futures.

Gold Futures Gain on Demand for Alternative to Slumping Dollar

April 30 (Bloomberg) -- Gold in New York rose, erasing earlier losses, as the euro gained against the dollar, boosting the appeal of the precious metal as an alternative investment. The price of silver was unchanged.
Gold is sold in dollars, and five of the past six bear markets in the U.S. currency have led to a higher gold price. Gold has gained 7.1 percent this year, while the euro had risen 3.5 percent against the dollar.
``The only driver gold has today is the dollar, and sentiment on the dollar is certainly negative,'' said Frank Lesh, a trader at FuturePath Trading LLC in Chicago.
Gold futures for June delivery rose $1.70, or 0.3 percent, to $683.50 an ounce on the Comex division of the New York Mercantile Exchange. The price earlier fell as much as $3 to $678.80.
Consumer spending in the U.S. rose less than forecast in March, fueling speculation that the Federal Reserve will keep interest rates steady. The Fed has maintained rates at 5.25 percent since June. Higher rates tend to attract investment in the U.S. dollar.
``The trend is still against the dollar,'' said Walter Otstott, a senior broker at Dallas Commodity Co. in Dallas. ``I can't see the Fed raising rates and that would tend to weaken the dollar.''
Gold's gains were limited as some investors bet on short- term declines in the euro. The 14-day relative-strength index for the currency rose above 70 twice last week, an indication prices may be poised to fall.

UPDATE 6-Gold slips on oil but seen ready to rally

LONDON, April 30 (Reuters) - Gold ended lower by afternoon in New York on Monday, tracking weaker oil prices, but dealers said the market could rally later this year.
Prices had fallen three percent in a week from an 11-month high of $693.60 an ounce, but a weaker dollar outlook would revive gold's appeal to investors.
Gold fell as low as $674.40 an ounce before rising to $678.20/678.70 by 3:25 p.m. EDT (1925 GMT), against $681.30/681.80 in New York late on Friday, when it gained nearly $7 on news of a foiled al Qaeda-linked plan to attack Saudi Arabia's oil facilities.
Most-active gold for June delivery on the COMEX division of the New York Mercantile Exchange settled up $1.70 at $683.50 an ounce, traded in a tight $6-range from $678.80 to $684.90.
"We are building a base around $675. Energy prices are a bit softer today and there is some pressure coming from the dollar," a European analyst said.
The dollar fell toward record lows against the euro, on track for the largest monthly decline since November. A lower greenback makes dollar-denominated assets like gold cheaper for investors holding other currencies.

Spending Sluggish Amid High Energy Costs

WASHINGTON (AP) -- Consumer spending rose at the weakest pace in five months in March as a surge in gasoline prices left shoppers with little left over for other items.
The Commerce Department reported Monday that consumer spending on all items was up 0.3 percent last month, the slowest increase since a similar rise in October. That lackluster gain came even though personal incomes rose by a healthy 0.7 percent last month.
The spending performance in March was even weaker when the effects of higher gasoline prices were removed. After adjusting for price increases, consumer spending actually fell by 0.2 percent in March, the poorest showing since September 2005 when the economy was suffering the aftershocks of Hurricane Katrina.
"People spent more in March but may be enjoying it less as the rising price of energy is cutting into what they actually take home," said Joel Naroff, chief economist at Naroff Economic Advisors, a private consulting firm.
On Wall Street, the Dow Jones industrial average fell 58.03 points to close at 13,062.91. But even with the loss on the final trading day of the month, the Dow still posted a 5.7 percent gain for all of April, its best peformance since April 2003, as investors put aside worries about weak economic growth to focus instead on strong corporate earnings reports.

German Exchange to Buy ISE for $2.8B

NEW YORK (AP) -- With stock options trading now one of the world's fastest growing markets, Deutsche Boerse AG's pact to buy International Securities Exchange Holdings Inc. for $2.8 billion could lead to more deals -- and perhaps a rival bid for the second-largest U.S. options exchange.
The German stock exchange on Monday announced the $2.8 billion acquisition of New York-based ISE, a deal that will create the world's top options market, rivaling U.S. players like the Chicago Board Options Exchange and Chicago Mercantile Exchange.
With ISE investors getting an almost 50 percent premium for their shares, the offer was viewed on Wall Street as being one of the most aggressive made during a period of growing consolidation among global exchanges. It also ups the ante for NYSE Euronext Inc. and Nasdaq Stock Market Inc., both keen on expanding farther into options trading.
"It was somewhat out of character for Deutsche Boerse to be so aggressive, but it shows how important this is for them," said Richard Herr, an analyst with Keefe, Bruyette & Woods. "But, I can't totally rule out a competing bid."

Circuit City stock tumbles after weakened outlook

SAN FRANCISCO (Dow Jones) -- Shares of Circuit City Stores Inc. slumped 10% late Monday after the company forecast a loss from continuing operations for the first quarter of fiscal 2008 and withdrew its previously issued outlook for the first half of the full-year 2008 period.
Shares of the electronics retailer fell to $15.70 in after-hours trade, down $1.75 .
Circuit City said it " experienced substantially below-plan sales" in April, mostly in large flat-panel and projection TVs.
The company subsequently said it expects to post a pre-tax loss from continuing operations of $80 million to $90 million in the first quarter of fiscal 2008; it also forecast pre-tax earnings from continuing operations as a percentage of consolidated net sales at the low end of its prior forecast range of 1.4% to 1.8% for the full-year 2008 period.

Wal-Mart faces blast from human rights group

NEW YORK (Reuters) -- Wal-Mart Stores Inc. has used a myriad of tactics, including some that are illegal, to hinder the ability of its workers to form labor unions, a human rights group said in a report to be released Tuesday.
According to Human Rights Watch, the world's largest retailer has restricted the dissemination and discussion of pro-union views, threatened to withhold benefits from workers who organize, interrogated workers about their union sympathies and sent managers to eavesdrop on employee conversations.
Wal-Mart employs more than 1.3 million workers nationwide, none of which is in a union. "Wal-Mart workers have virtually no chance to organize because they're up against unfair U.S. labor laws and a giant company that will do just about anything to keep unions out," said Carol Pier, who researched the report for Human Rights Watch, which probes human rights abuses around the world.