(Updates with quotes, prices)
By Atul Prakash
LONDON, April 11 (Reuters) - Gold drifted lower on Friday
despite a decline in the dollar, and analysts said the market
was likely to continue trading in a range in the near term.
The catalyst could come from sharp changes in the currency
and the energy markets or heavy buying from investment funds,
betting on strong returns in the long term, they said.
Gold <XAU=> was quoted at $919.80/920.80 an ounce at 1450
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 dollar extended losses against the euro after a report
showing that U.S. consumer confidence dropped to its lowest in
26 years added to concerns about the economy. The euro <EUR=>
was last at $1.5817.
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 edged down after the International Energy Agency cut its
oil demand growth forecast for 2008, but firm Chinese demand and
a reminder that OPEC ministers still think supply adequate
capped losses.
But some analysts said the market might gather upward
momentum next week.
"The $930-mark has proved a hard nut to convincingly crack
in the past few days, but I think gold is in for a fresh push
higher," said David Thurtell, metals analyst at BNP Paribas.
"U.S. consumer sentiment data was extremely weak, and the
possibility is that the euro can touch $1.60 next week, dragging
gold higher," he added.
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.
"The euphoria towards the precious metals complex, and
specifically gold, in the first quarter of this year has turned
sour over the past few weeks," Deutsche Bank said in a report.
"Before we recommend a long gold exposure, we would cite the
G7 Finance Ministers' meeting this weekend as a possible event
risk for the gold price, given the possibility of a statement
concerning the extreme weakness of the U.S. dollar and
consequently another pocket of U.S. dollar strength."
In other markets, U.S. gold futures for June delivery <GCM8>
fell $8.7 an ounce to $923.10 an ounce.
Spot platinum <XPT=> fell to $2,007/2,017 an ounce from
$2,024/2,032 in New York.
"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."
Silver <XAG=> was down at $17.56/17.61 versus $17.95/18.00
in the U.S. market, but palladium <XPD=> rose $7.50 to $466/474.
(Reporting by Atul Prakash; editing by Chris Johnson)
