NEW YORK, Sept 27 (Reuters) - COMEX gold turned higher after the open Friday as Wall Street caught another case of the jitters after recovering over the past two sessions from multiyear lows.
"The stock market is down a little bit," explained a gold and silver broker on the floor. "(Gold) was just overdone yesterday. The funds are still long and I guess they don't want to really flush them out yet."
December gold at 0932 EDT was up 50 cents at $322.20 an ounce, steadying from its early low at $320.20 and touching $323.10.
The contract fell Wednesday and Thursday, correcting an advance to a 13-week high at $329.30 on Tuesday, when gold neared the 2-1/2-year peaks just over $330 from early June.
The Dow Jones industrial average fell 54 points in the first minutes of trade, retracing a two-day gain of more than 300 points as the market fretted about corporate earnings, economic growth and the prospects of a U.S.-led war to disarm Iraq.
The Dow and the Nasdaq hit respective 4- and 6-year lows this week, spawning a hunt for safe havens like gold.
The dollar was neutral on Friday, but its recent weakness was a supportive factor, making bullion look more affordable to overseas investors in their own currencies.
"There was a short squeeze this morning. A lot of guys got short right off the opening," said another floor broker. "The weakness in the stock market made it possible for it to happen."
He said there was very little customer flow mixed in, continuing, "The end of the month is giving people the impression that we might see something, but it isn't actually the end of the month. End of month is Monday."
Spot gold was unchanged from late Thursday at $320.40/90. Bullion dealers fixed London's morning spot reference price at $320.15.
December silver was off 2.5 cents at $4.50 an ounce, matching Thursday's 3-week low after topping at $4.545.
Spot silver was at $4.48/50, off $4.50/52 at Thursday's close. It fixed at $4.51 an ounce.
NYMEX October platinum was down $1.40 to $557 an ounce. Spot platinum was last at $558/563.
December palladium was down $3.15 at $316.25 an ounce. Spot palladium was indicated at $312.75/324.75.