Gold futures rose above $930 an ounce Wednesday as the metals' investment appeal increased with the U.S. dollar sliding and with expectations that the meeting of the Group of 20 nations may not pull the world's economy out of recession.
Investors remained cautious ahead of the G20 meeting on Thursday, when the dollar's status as the global reserve currency is expected to be discussed. Also expected to be discussed is the planned sale of 403 tons of gold by the International Monetary Fund. Meanwhile, the European Central Bank said Wednesday it had completed the sale of 35.5 tons of gold.
Gold for April delivery was last up $7.60, or 0.8%, at $930.20 an ounce on the Comex division of the New York Mercantile Exchange. The more active June contract was also up at $931.20.
Investors were "waiting for a better sense of direction and some results from the London G20 summit," said Jon Nadler, senior analyst at Kitco Bullion Dealers.
While gold was rising Wednesday, "the moves to higher ground were still seen as range-bound and not as the turning of a new page," he added.
Wednesday's gain in gold came after it ended March trading down for the first month in five. The metal, however, rose 4.3% in the first quarter.
The ECB announced Wednesday that its gold sales were in full conformity with the second Central Banks Gold Agreement, which was signed in 2004 by the ECB and other European major official gold holders. The ECB didn't elaborate how it plans to use the proceeds.
The second CBGA, which caps total gold sales of the signatories at 500 tons a year, expires in September. Some analysts expect a third CBGA to be signed before September. See related story about central bank gold selling.
The IMF has planned to sell 403 tons of gold to diversify its revenue and strengthen its balance sheet.
Some investors are worried that the IMF sale could pressure gold prices, although the fund has said it plans to coordinate closely with CBGA signatories to minimize the impact of this large gold sale.
In currencies trading Wednesday, the dollar was lower against most of its major rivals, with the dollar index down 0.3% at 85.481. A weaker greenback tends to push up dollar-denominated gold prices, though this pattern hasn't always held true in gold's recent trading.
In economic news Wednesday, U.S. private-sector firms cut 742,000 jobs in March, signaling another terrible employment report on Friday, according to the ADP employment index released Wednesday. See full story.
In other metals trading Tuesday, silver for May delivery fell 7.5 cents, or 0.6%, to $13.06 an ounce. April platinum added $16.10, or 1.4%, to $1,136.90 an ounce, and June palladium lost $1.80, or 0.8%, to $217 an ounce.
May copper sank 3.85 cents, or 2.1%, to $1.806 a pound.
