* Gold snaps four straight sessions of gains
* Palladium hits all-time peak of $1,620.5/oz
* Gold could break resistance at $1,321/oz -technicals
By Karthika Suresh Namboothiri
March 21 (Reuters) - Gold prices dipped on Thursday in volatile
trade after hitting three-week highs earlier in the session as a set
of better than expected U.S data lifted the dollar, while palladium
notched a record peak on supply concerns.
Spot gold slipped 0.4 percent to $1,307.23 per ounce as of 2
p.m. EDT (1800 GMT), having earlier hit $1,320.22, its highest level
since Feb. 28. The metal was set to snap five consecutive sessions of gains.
However, U.S. gold futures settled 0.4 percent higher at
$1,307.3 an ounce.
The number of Americans filing applications for unemployment
benefits fell more than expected last week, and other data showed a
measure of factory activity in the mid-Atlantic region rebounding
sharply this month after heavy falls.
"The data was decent today with Philly Fed noticeably more
robust and positive jobs data for the payrolls survey week," said
Tai Wong, head of base and precious metals derivatives trading at BMO,
adding that caused a momentary dip in gold prices.
"Gold's failure to extend gains above $1,320 has triggered
some liquidation from long options positions and also fueled
algorithms sensing short term weakness."
Against a basket of currencies, the dollar index rose to
96.53, up 0.8 percent on the day, making dollar-denominated gold more
expensive for investors of other currencies. A measure of stocks
across the globe rose in a volatile session, led by gains on Wall
"The dollar index is pushing up and weighing on the gold
market, equity markets are starting to come back," said Phil
Streible, senior commodities strategist at RJO Futures in Chicago.
The U.S. central bank on Wednesday stunned markets by abandoning
all plans to raise rates this year, a signal its three-year campaign
to normalise policy might be at an end.
Higher interest rates raise the opportunity costs of holding gold,
which earns nothing and costs money to store and insure.
Palladium touched an all-time high of $1,620.52 an ounce in the
session, and was currently up 0.2 percent at $1,606.50 per ounce.
Analysts attribute this to concerns about a supply crunch in the
autocatalyst metal. A possible temporary export ban on precious metal
scrap from Russia and hopes of economic stimulus from China have also
helped lift prices.
"There is a big deficit of palladium production this year.
Until auto-companies switch over to platinum, palladium prices are
going to be pretty strong," said Bill O'Neill, partner at Logic
Meanwhile, platinum prices fell 0.5 percent to $854.50 per
ounce, having earlier touched a three-week high of $875.15. Silver
dropped 0.2 percent to $15.41.
(Reporting by Karthika Suresh Namboothiri and Nallur Sethuraman in
Bengaluru Editing by Matthew Lewis and Chizu Nomiyama)
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