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Silver 31.86, Gold 1658.60, Near Steady As Traders Weigh US Data, Demand
Mar 29, 2012 By Matt Day Of DOW JONES NEWSWIRES

--Comex April gold recently up $2.60, or 0.2%, at $1,660.50 a troy ounce
--Weaker-than-expected US GDP supports gold demand as hedge against more Fed easing
--Indian gold retailers extend strike through at least Saturday

NEW YORK (Dow Jones)--Gold futures shuffled between slight gains and losses on Thursday, as traders weighed the likelihood of continued easy money policies from Federal Reserve against weak physical demand for the precious metal.

A weaker-than-expected reading Thursday on U.S. growth bolstered the view that the Federal Reserve would hold to its easy money policies to prop up the economy, adding support to gold. But the precious metal's gains were capped by still-weak physical demand for the metal during a strike in India's gold-retail sector.

The most actively traded gold contract, for April delivery, recently rose $2.60, or 0.2%, to $1,660.50 a troy ounce on the Comex division of the New York Mercantile Exchange.

Gold has spent much of the last week caught between conflicting signals. Physical demand, an important support for prices, has been weak as gold sellers in India strike in protest of increased taxes on gold imports and sales. India is the world's top importer of the precious metal.

"People are talking about how much (consumers) will want to spend with the rising cost of buying gold there," said Adam Klopfenstein, a market strategist with Archer Financial Services.

Indian gold sellers have extended their strike until at least Saturday, a spokesman for the protesting gold retailers said on Thursday.

But demand for gold as an investment helped prop up futures after Federal Reserve Chairman Ben Bernanke underlined the central bank's commitment to low interest rates. Such accommodative monetary policy can send investors seeking higher returns into gold.

In response, gold futures rose on Tuesday to just short of $1,700 an ounce before giving up those gains. Hopes for Federal Reserve action again offered some support to gold on Thursday after the reading on U.S. gross domestic product missed economists' expectations.

Analysts with Goldman Sachs on Wednesday reiterated their bullish outlook on gold, citing support from low U.S. interest rates. The investment bank expects gold to rise to $1,840 a troy ounce in the next six months.

--By Matt Day, Dow Jones Newswires; 212-416-4986; [e-mail]

--Biman Mukherji and Tatyana Shumsky contributed to this article.
(END) Dow Jones Newswires
03-29-12 0951ET

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