NEW YORK, Dec 23 (Reuters) - COMEX gold eased Tuesday morning but was cushioned above $410 an ounce as a safe alternative investment while the dollar held near its lows against the euro and fears of attacks by al Qaeda kept traders on edge.
Activity was subdued in a holiday-shortened week. The exchange will close early on Christmas Eve Wednesday, and will not reopen after Christmas until Monday.
Gold traders shrugged off revised data confirming the U.S. economy expanded at a breakneck 8.2 percent rate in the third quarter, and on November personal income rising a better-than-expected 0.5 percent, while spending came in at a more restrained 0.4 percent rise.
Around 9:55 a.m. EST (1455 GMT), the February contract was off 60 cents at $410.70 an ounce, trading in a tight $411.40 to $409.60 band.
"There was nothing on the numbers. Most of the books are closed," said a floor broker.
The market was digesting the rally to $414.60 an ounce on Thursday, the highest price for gold since February 1996.
Over the weekend, the U.S. government raised its terror threat alert to orange, the second highest level, on indications that al Qaeda might be planning attacks on the United States around the Christmas and New Year holidays. This enhanced gold's geopolitical risk premium.
Gold's 16-percent rally this year was built on investor diversification out of the U.S. dollar as well as anxiety about the war in Iraq, its aftermath, and continued concerns about Islamic extremism.
Funds seem comfortable holding one of the largest longs on record as the end of the year approaches. Dealers said an unsafe world was to a great extent built into the price of gold.
Spot gold was quoted at $409.75/0.45, off from the close at $410.00/75. London bullion dealers fixed the afternoon reference price at $409.80.
Frank Aburto, a bullion dealer with F.C. Stone, said gold could see some bigger swings next week before the end of the year. But he predicted it would stay in a $402 to $413 range.
"Unless something dramatic happens. Of course, we are at a very high state of alert at this point," he said.
COMEX March silver was flat at $5.725 an ounce. It held near Monday's 4-1/4-year high, traveling from $5.745 to $5.70.
Spot silver was unchanged at $5.69/71. The fix was at $5.685.
NYMEX January platinum was off $1.20 at $797.00 an ounce following Monday's $23.30 shakeout. Spot platinum was at $805.00/810.00.
March palladium was off 25 cents at $203.00 an ounce. Spot fetched $198.00/203.00.
Russia's Norilsk Nickel said Tuesday that 2003 palladium shipments volume would rise as metal kept off the market in 2002 was sold.