NEW YORK, Dec 26 (Reuters) - COMEX gold closed higher Thursday after spot gold rose overnight and the U.S. dollar eased, but the safe haven metal remained capped below $350 an ounce in holiday-thinned trade, dealers said.
Benchmark February gold on the New York Mercantile Exchange's COMEX division gained $2.10 to $349.40 an ounce, after ranging from $344.80 to $350.60, as it consolidates under last week's near six-year high at $355.70.
"You are up because spot gold is up, and locals were trying to go for some buy-stops above $350. but there is no real post-holiday volume -- it is very light," AG Edwards commodity commentator James Quinn said.
Spot gold climbed after ticking up earlier in subdued Tokyo trade. It last fetched $348.55/9.25, up from $345.00/60 late on Tuesday before the market closed up shop on Wednesday for Christmas.
Trading resumed quietly in New York even as tensions over the threat of U.S. confrontation with Iraq and North Korea simmer in the background, as markets in Europe, Hong Kong and Australia were shut until Friday for holidays.
Some COMEX traders also kept to the sidelines for vacations and as the first Christmas snowstorm in the metropolitan area in 33 years on Wednesday kept some players out of the market, traders said.
"Support in February gold is under $340 and resistance is above $352, but I don't see gold reaching any of those levels either today or tomorrow," one one floor source said earlier.
The dollar eased in the afternoon after surprisingly good data on U.S. jobless claims failed to boost the currency burdened by geopolitical concerns.
It earlier slipped to a three-year low against the euro at $1.0363 per euro and a four-year low against the Swiss franc at 1.4013 francs in quiet Asian trade as investors continued to pare U.S. holdings.
A weaker dollar versus foreign currencies makes dollar-denominated gold cheaper in relative terms for overseas buyers.
Jitters about the standoff with Iraq over its alleged stockpiles of chemical, biological and nuclear arms were compounded by North Korea's announcement Sunday that it was reactivating a nuclear reactor suspected of being part of a weapons program and closed in 1994.
The U.N. atomic watchdog, the International Atomic Energy Agency, said Thursday North Korea's move to activate nuclear facilities was "very worrying," adding that the nation had moved 1,000 fresh fuel rods to a reactor that produces plutonium used in nuclear warheads.
Gold, seen as a form of portfolio insurance in troubled times, is up about 26 percent in 2002 with one week left -- one of the best performing financial assets in a year marked by international tension, recession fears, corporate malfeasance and talk of deflation.
The Dow Jones industrial average rose 47 points in mid-afternoon to 8,495, boosted by jobless claims data that soothed investors' worries over a sluggish economy, a potential war with Iraq, and high oil prices.
In other precious metals, COMEX March silver rose 4.3 cents to $4.705 an ounce, in a $4.645-$4.715 range. Spot silver was at $4.68/70, up from its last New York close Tuesday at $4.64/66.
NYMEX January platinum advanced $2.70 to $587.70 an ounce. Spot platinum was at $584.70/589.70.
March palladium dipped $1 to $234 an ounce. Spot palladium traded to $230/238.