US gold futures ended at a three-week high on Thursday, lifted by a dip in the dollar, which failed to draw support from two days of congressional testimony by US Federal Reserve Chief Alan Greenspan, dealers said. Silver also gained, settling close to a two-month peak, as fund and trade interest kept the market's recent rally alive. Gold for April delivery on the New York Mercantile Exchange's Comex division was up $1.70 at $428.60 an ounce, the highest close since January 26, after trading from $425.50 to $429.80.

Metals prices advanced as the dollar posted losses of a half a cent versus the euro over Greenspan's two days of testimony, despite his hints that US interest rates will continue to go up, which is seen as dollar-positive.

But gold held below a key chart point as traders waited to see if the dollar would extend a week-old downward trajectory. "The (dollar) strength we've seen has settled down and it's back to business on the gold price," Bernard Hunter, director of precious metals marketing at ScotiaMocatta in Toronto.

"But I wouldn't expect to see a serious attempt on $430 and higher prices until and unless we get a clear break of $1.31, and possibly higher, on the euro," he said. A softer greenback usually boost dollar-denominated gold as it makes the metal gets less expensive for non-US buyers.

The euro was at $1.3084, from $1.3030 late on Wednesday. The BullionDesk.com said the euro remains the main driver for gold, though geopolitical factors such as heightened tensions between the United States and nations including Iran, Syria and North Korea added an element of "safe haven" interest.

Gold futures were stuck in a trading range from about $424 to $430, brokers said, while the bullion price was in a band between $421 and $428. Spot gold last priced at $427.10/7.80 an ounce, above on Wednesday's New York close at $425.50/6.20.

On Thursday's afternoon fix in London was at $426.25. Silver prices are holding up above $7.30 an ounce amid a more positive technical outlook after last week's recovery from the $6.50 level.

March silver rose 11.5 cents to close at $7.37 an ounce, trading from $7.175 and $7.43, which was its the Gary metal's priciest since December 8. "There's a positive outlook for the silver and I would say the price now has moved beyond that corrective stance," said ScotiaMocatta's Hunter.

"There now is very, very good fund interest and professional interest." Spot silver climbed to $7.32/35, from the prior close at $7.24/27. The fix was at $7.255. Nymex April platinum rose $7.20 to $863.20 an ounce.

Spot was at $862/867. March palladium settled at $183 an ounce, down 5 cents. Spot fetched $179/183.

Copyright Reuters, 2005