(Recasts, adds quotes, changes prices, pvs SINGAPORE)
By Atul Prakash
LONDON, April 11 (Reuters) - Gold steadied on Friday despite
positive factors such as a weaker dollar and a rise in oil, and
analysts said the market was looking for price triggers to break
the current trading range.
The catalyst could come from sharp changes in the currency
and the energy markets or heavy buying form investment funds,
betting on strong returns in the long term, they said.
Gold <XAU=> was quoted at $924.90/925.70 an ounce at 1020
GMT, against $925.90/926.70 in New York late on Thursday and a
record high of $1,030.80 on March 17.
"We are trading in a range and there is no sign that we are
going to break out of the current wide range in the near term,"
said Wolfgang Wrzesniok-Rossbach, head of marketing at Heraeus,
a German precious metals trading group.
"We have an all-time high in the oil price and a near record
high in the euro-dollar, but gold is still $100 away from its
own historic highs. Probably there are some more long positions
waiting to be sold, once gold goes up again," he added.
The euro moved back up towards record highs versus the
dollar, as investors focussed on the European Central Bank's
inflation concerns that will likely prevent it from cutting
interest rates for a while.
The ECB held rates at 4 percent as expected on Thursday,
with President Jean-Claude Trichet balancing upside price risks
with downside growth concerns.
A weaker dollar makes gold cheaper for holders of other
currencies and often lifts bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
Oil held around $110 a barrel, as a rebound in the dollar
against the euro and Saudi Arabia's comment that markets were
well supplied led investors to reduce positions, but firm
Chinese demand lent support.
"Traders have again been looking to the currencies for
direction, but despite breaking above the short-term downtrend
line, the metal continues to meet chart resistance," said James
Moore, analyst at TheBullionDesk.com.
"That suggests gold may look to spend some more time
consolidating above $900 an ounce," he said in a report.
GOLD STRUGGLES
Gold struck a record high above $1,000 an ounce last month
but has since struggled to sustain the uptrend, with a broad
commodities pullback dragging the price down.
But the metal had potential to jump again, analysts said.
They said that as fears of inflation lingered, gold's appeal
as a hedge was likely to rise, while expectations of further
rate cuts in the United States also made the metal an attractive
choice for investors seeking an alternative asset.
Precious metals consultancy GFMS Ltd said this week the
factors supporting prices over the last few months, such as the
credit market crisis, would remain in place and investors would
continue to look at bullion for strong returns. []
In other markets, U.S. gold futures for June delivery <GCM8>
fell $3.1 an ounce to $928.70 an ounce.
Spot platinum <XPT=> fell to $2,005/2,015 an ounce from
$2,024/2,032 in New York, silver <XAG=> was flat at $17.95/18.00
and palladium <XPD=> fell to $458/463 from $458.50/463.00.
"The nature and extent of the South African power shortages
that brought (platinum) production to a halt for five days in
January are unlikely to be resolved in the near term given the
operational and capacity constraints," Barclays Capital said.
"We forecast prices to average $2,100/oz in Q2 as platinum
supplies are heavily dependent on South Africa and the delicate
power supply situation as well as mine safety concerns leave
mine output extremely susceptible to potential disruptions."
(Reporting by Atul Prakash; editing by Chris Johnson)
