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Firm gold meets resistance at $US1130

GOLD was helped by increasing risk tolerance today, a day after the Federal Reserve left interest rates low, but prices were capped as participants’ bullishness was limited.

Most actively traded April gold rose $US1.70, or 0.2 per cent, to settle at $US1124.20 an ounce while thinly traded nearby March gold gained $US1.80, or 0.2 per cent, to settle at $US1124 on the Comex division of the New York Mercantile Exchange.

Investors were moving out of the US dollar — with the index down 0.2 per cent shortly after gold closed — and into perceived riskier assets like gold and equities.

After the Fed yesterday left interest rates unchanged at ultra-low levels, “the (gold) market is looking to see whether the dollar will actually stay down,” said Ira Epstein, director of the Ira Epstein division of The Linn Group.

KEY COMMODITY PRICES: oil, gold, base metals, livestock and wheat

Participants were thinking prices are high enough for the moment after the previous session’s marked gains, said Patrick Donnelly, a senior market strategist at Olympus Futures.

The metal was having trouble at resistance at the $US1130 area, he said.

Silver futures gained with copper on optimism about Chinese appetite for industrial metals and as the US dollar weakened. Comex May silver gained US16.9 cents, or 1 per cent, to settle at $US17.523 an ounce.

Stephen Platt, analyst with Archer Financial Services, said the grey metal gained amid evidence of the Chinese economy advancing.

The World Bank forecast that China’s economy will climb 9.5 per cent in 2010, an upward revision from the bank’s 9 per cent forecast made in January.

Meanwhile, Nymex April platinum gained $US4.90, or 0.3 per cent, to settle at $US1635.60 an ounce while June palladium on the exchange rose $US6.45, or 1.4 per cent, at $US478.85 an ounce.

“It’s generally on the back of a weaker dollar,” a trader said…read more at The Australian