(Updates with prices, detail)
By Atul Prakash
LONDON, April 18 (Reuters) - Gold drifted lower on Friday
after early gains, and analysts said the market needed a
catalyst to break out of its trading range and march towards
record highs above $1,000 an ounce.
The upward push could come from poor earnings results of
large U.S. financial companies, weak economic data or a sharp
change in the currency and energy markets, analysts said.
Gold, traditionally seen as a safe-haven asset and a hedge
against inflation, often thrives on bad news. The metal is also
considered as an alternative investment to the dollar and often
moves in the opposite direction of the currency.
"The precious metals markets have had a fairly good run this
week and they are just consolidating," said David Thurtell,
metals analyst at BNP Paribas.
"It's likely that the market will trade pretty quietly for
the next week. There's not a lot of data coming out, and unless
some of this subprime stuff or any of the company reports are
dramatically disappointing, we'll be waiting for the Fed meeting
on the 30th."
Gold <XAU=> rose as high as $946.40 an ounce before falling
to $931.90/932.60 at 1049 GMT, against $938.90/939.70 in New
York late on Thursday, when it hit a three-week high. The metal
traded in a range of $914.00-$952.60 this week.
U.S. gold futures for June delivery <GCM8> fell $7.00 per
ounce to $935.80 in electronic trade.
Bullion investors watched the dollar and oil for direction.
Oil prices drifted off record highs above $115 a barrel
after setting a series of new peaks this week as investment
flows pushed several commodity markets to fresh highs.
DOLLAR MOVES WATCHED
The dollar jumped to a one-month peak against the yen and
hit session highs against the euro after Q1 results from
Citigroup contained less damage from the crisis in credit
markets than some had expected.
But the U.S. currency hovered not far from recent record
lows against the euro. Analysts said the dollar might come under
pressure again as the U.S. Federal Reserve was seen cutting
interest rates further from the current 2.25 percent.
Huge writedowns from U.S. financial institutions were
undermining confidence on the economy and the dollar took a
knock on Thursday after the Philadelphia Federal Reserve
business index fell sharply in April.
Any sign of weakness in the U.S. economy tends to lower the
dollar and helps bullion prices.
"The increasing risk appetite of investors could lead to
shifts of assets into stock markets, which might be negative for
gold," analysts at Dresdner Kleinwort said in a market report.
"All in all, it should be a quieter day for gold, unless
unforeseen events hit the news wires."
In other metals, palladium <XPD=> rose $2 to $458/463 an
ounce, but silver <XAG=> fell to $18.10/18.15 an ounce from
$18.23/18.28 in New York late on Thursday.
Platinum <XPT=> fell to $2,030/2,040 an ounce from late New
York levels of $2,042/2,052, but analyst saisd the market was
expected to remain supported.
"The South African power shortages are keeping the platinum
market on edge as a swift resolution to the structural problems
is far from near," Barclays Capital said in a report.
"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.
(Additional reporting by Alastair Sharp in London; editing by
Chris Johnson)
