NEW YORK, Sept 18 (Reuters) - COMEX gold was challenging the $380 level early Thursday, rising toward last week's 7-month high on the back of a broadly weaker dollar and persistent uncertainty about global politics and the economy.
"It's back on the march again. We're seeing fund buying, seeing good physical buying and it's still a bull market," said Ian MacDonald, head of bullion trading at Commerzbank.
"The stars have already lined up for the gold market," he continued. "It is a dollar diversification that we're seeing. Gold has replaced the U.S. dollar as the safe haven."
December gold at 0926 EDT was up $3.10 at $380.50 an ounce, trading from $377.10 to $381.00. Spot bullion rose to $379.25/95 from $376.15/6.85 late Wednesday and Thursday's morning fix in London at $376.95.
The benchmark contract topped at $384.80 last Tuesday, and analysts expect it to soon exceed the 6-1/2-year highs from February around $390 though a near record large fund long position is hanging over the COMEX.
Gold rallied after Tuesday's Federal Reserve announcement that it was holding U.S. interest rates at 45-year lows, which makes non-interest bearing assets like gold more attractive compared to dollar-deposits.
The market is watching for a possible renewal of the 1999 Washington Accord, which limited European central bank gold sales to 400 tonnes a year and expires in September 2004.
"The IMF meeting this weekend continues to stir up talk about whether or not there will be an announcement on the possibility of renewal of the Central Bank Gold Agreement," wrote Rhona O'Connell, market research director at the World Gold Council, referring to Wednesday's comments from officials for the European System of Central Banks that the issue might be discussed on the sidelines of the Dubai gathering.
"The consensus opinion among the assembled parties at the (Gold Fields Mineral Services) seminar yesterday was that a renewal is likely, albeit in modified form, but that a year in advance is too early for an agreement to be concluded," O'Connell wrote.
The original pact helped shore up gold from 20-year lows by making official gold sales more predictable.
December silver was up 4.8 cents at $5.33 an ounce, trading $5.29 to $5.375, just shy of last week's 3-year high at $5.38.
Spot silver was quoted at $5.27/29, up from $5.23/25 late Wednesday and Thursday's fix at $5.30.
NYMEX October platinum was $5.50 higher at $698.00 an ounce. Spot was last indicated at $699.00/704.00.
December palladium slipped $1.25 to $216.00 an ounce in the morning. Spot was at $211.00/216.00.