Gold steady, keeps $600 in sights
TOKYO, Apr 4 (Reuters) Gold mostly hovered around 8 an ounce on Tuesday, and traders said the precious metal remained well-placed to mount a fresh challenge to the key psychological level of 0.
The precious metal's meteoric rise -- it hit a new 25-year high on Monday -- has been part of a broader, fund-led rally in global commodities markets that has also included base metals and crude oil.
Spot gold climbed as high as 1.50 an ounce before ending New York trading at 8.10/589.00 on Monday, about 10 percent above levels seen at the start of the year.
It was trading at 7.30/588.20 at 0438 GMT.
Physical buying and bargain hunting were expected to support the market on any dips at the beginning of a new quarter.
Traders also said most factors support the view that gold will again take aim at 0.
''Oil has been firm after topping , and we see that silver and non-ferrous metals are also fundamentally strong,'' said Hiroyuki Kikukawa, an associate director at Nihon Unicom Corp.
All these factors will help lift gold to again challenge 0, he said.
''What we are seeing now is a brief correction,'' he said.
High crude oil prices fan inflationary fears, and are often a factor that drives investors to seek gold as a hedge.
Crude oil prices remain above , providing impetus for gold to gain.
NYMEX crude for May delivery was trading at about .40 a barrel in ACCESS electronic trading.
Fellow precious metal silver's recent stellar performance has also inspired gold to climb.
Traders began to actively chase silver last month, lifting it to a 22-year high, after talk emerged that an exchange-traded fund might be launched soon, raising chances that consumer and speculative demand would increase.
Silver was at .72/11.75 compared to late New York levels of .75/11.78 an ounce.
Copper and zinc have been among the metals that have been marking a series of record highs this year on the London Metal Exchange, the world's largest non-ferrous metals market.
On Monday, copper rallied 4 percent to a record ,616 a tonne in short-covering, and as funds bought on the first day of the new quarter.
Gold has spiralled higher together with the rally in base metals, traders said.
Geopolitical concerns, such as worries about Iran's nuclear programme, have also driven investors to seek gold, the traditional safe-haven investment.
June gold on the New York Mercantile Exchange's COMEX division rose .60 or 1.3 percent to finish at 4.30 an ounce on Monday after hitting 6.80, the highest for a benchmark contract since January 1981.
The benchmark most forward February contract on the Tokyo Commodity Exchange <0#JAU:> fell 10 yen per gram to 2,249 yen.
Precious metals investors were also keeping an eye on currency movements.
REUTERS DKS SP1110