COMEX gold up on short-covering in early trade


NEW YORK, Feb 24 (Reuters) - COMEX gold rose in technical trading Tuesday morning as the dollar faltered and an audiotape surfaced of a top al Qaeda leader saying the Islamic group had not been crushed.

The active April contract shook off Friday's 3 percent pummeling, perching above $400 an ounce and challenging resistance at $403, which was strong support until it gave way in Friday's heavy fund liquidation.

At 9:35 a.m. EST (1435 GMT), April gold was up $3.70 at $403.00 an ounce, trading from $396.10 to $403.40.

Spot gold was quoted at $402.40/3.15, up from the close at $398.00/8.75 and London's morning fix at $401.45.

"It's all technical," said a floor broker. "I think it was overdone on Friday. The view is looking for the downside. Most people down here are still bearish."

The euro rose to $1.2603/08 from $1.2555/59 at the close, arming euro-zone investors with more bullion purchasing power.

Benchmark gold hit a 15-year high on Jan. 6 at $432.30 as the euro rose to record highs against the beleaguered dollar. On Friday gold fell to $394.50, its lowest since Nov. 26, as the euro delved a three-week low.

In a tape broadcast Tuesday by Al Jazeera television, Ayman al-Zawahri, right-hand man to Osama bin Laden, believed to have masterminded the Sept. 11 2001, attacks on the World Trade Center and Pentagon, warned the United States to prepare for more attacks.

"Maybe it was factored mentally into what this market is showing. But it's not really a forefront issue for why we're bid this morning," said a bullion trader.

March silver was up 3.50 cents at $6.525 an ounce, trading from $6.415 to $6.57.

Spot silver was quoted at $6.50/52, up from $6.46/48 late Monday but off since Tuesday's fix at $6.5375.

NYMEX April platinum was up $15 at $855.00 an ounce. Spot was last priced at $856.00/861.00.

March palladium was $8.90 higher at $238.00 an ounce. Spot fetched $235.00/240.00.



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