NEW YORK, March 20 (Reuters) - COMEX gold was soft but up from its low early Thursday, with traders awaiting cues from global markets after U.S. President George W. Bush launched the opening salvo of war in Iraq.
"The dollar is down a little bit, so I think we're getting a little bit of a pop (from that) in gold," said a floor broker. "Everything is going to be war-related right now. It's going to be very choppy."
Gold fell overnight after U.S. cruise missiles and stealth aircraft bombed Baghdad in dawn raids to kill Saddam Hussein, on suggestions that his location had been pinpointed by intelligence sources.
It was not the massive initial attack expected, and the Iraqi dictator appeared three hours later on television denouncing the "criminal, reckless little Bush."
But other markets went into a holding pattern, concerned about how long it would take to topple the regime and uncover its suspected caches of weapons of mass destruction.
COMEX April gold at 0948 EST was off 40 cents at $335.80 an ounce, trading between $337.60 and $331.80.
Spot gold was trading at $335.60/6.35, little changed from around $335.50/6.25 Wednesday after New York trading closed. London dealers fixed the early reference price at $335.50.
The euro firmed to $1.0631/33 early Thursday from $1.0559/65 late Wednesday. The Dow Jones industrial average was down 87 points after gaining 861 points since last week.
Gold failed to garner any safe-haven buying as "Operation Iraqi Freedom" commenced. Financial market jitters saw investors flock to gold during the many months of U.S. military build-up in the Middle East.
"If there is any retaliation on U.S. soil, gold is going to take off again. I don't think it's over for gold," Mark Barnard, vice president at Mitsui Global Precious Metals in New York, said late Wednesday as the bombing started.
"Clearly the financial markets think this is clarity. And if the markets are wrong, if this is more than a one-week event, it pushes gold back up again," he said.
Gold futures hit a 6-1/2 year high on Feb 5 at $390.80, but fell to a three-month low last week at $342 as war looked imminent and investors took profits.
"There is not a whole lot of talk about it. There is almost relief that it's already begun. As far as how the market will react, we're trading against the U.S. dollar and the perception corporate-wise of what's going to happen," said another broker.
Gold has a history of price volatility in times of war -- it rose more than $40 in the run-up to the 1991 Gulf War, then gave it right back once the war started.
May silver was up 1.5 cents at $4.435 an ounce, trading $4.395 to $4.445. Spot silver was last at $4.39/41, down from $4.41/43 late Wednesday. The fix was $4.405.
NYMEX April platinum was down $14.70 at $657.00 an ounce. Spot platinum was at $660.00/665.00 an ounce.
June palladium was $2.50 easier at $230.80 an ounce. Spot palladium fetched $231.00/236.00 an ounce.