By Chris Oliver
HONG KONG (MarketWatch) -- Benchmark Comex gold futures traded almost flat early Friday afternoon in East Asia, holding near a six-week high as investors fretted about inflation after the European Central Bank unveiled a surprise interest rate cut overnight, and with a subsequently stronger dollar capping gains. Gold for December delivery GC1Z -0.20% traded at $1,760.60 per troy ounce, down 0.2% from its New York settlement of $1,765.10 on Comex. The front-month contract rose sharply after the European Central Bank announced it was cutting its main refinancing rate by a quarter point, pushing down rates on deposits and lending by a similar amount. The U.S. dollar's gain during Asian traded also pressured gold, as a rising dollar often depresses the price for dollar-priced commodities. The December contract had rallied by $35.50 during the New York regular session, to $1,765.10, its highest settlement since Sept. 21.
