NEW YORK, Dec 19 (Reuters) - The gold feeding frenzy threw COMEX futures above $350 an ounce to their highest in almost six years early Thursday, with Washington expected to shortly assert that Iraq lied to the United Nations about its weapons programs.
The active February contract hit $355.70 an ounce in electronic ACCESS trade overnight, before buying subsided. That was the priciest for a benchmark contract since February 1997, and gold is up almost 12 percent this month and 29 percent for 2002 so far.
U.N. chief weapons inspector Hans Blix said Thursday morning the weapons declaration submitted by Iraq under the disarmament resolution has gaps. The market is now waiting for U.S. Secretary of State Colin Powell to deliver the U.S. response later Thursday.
"Powell is going to basically give his conclusion on this report, which is going to be very bullish on gold," said a dealer at a precious metals refiner. "Very bullish for gold means it's probably going to justify the move we've seen already."
He added, "On the other hand, you have year-end pending so people are probably squaring up books."
February gold at 0959 EST was up $1.70 at $344.10 an ounce, trading from a low of $343.30.
Spot gold was quoted at $343.50/4.25. It topped at $353.75 after closing New York at $342.00/75 Wednesday. London dealers fixed the morning spot reference rate at $345.75.
Dealers said some of the buying after New York closed Wednesday came after coin and bullion dealer Blanchard and Co. said it had filed an anti-trust lawsuit against Canadian miner Barrick Gold Corp. and commercial bank JP Morgan Chase, accusing each of manipulating the gold market to keep prices weak.
Barrick dismissed the allegations in the lawsuit -- which the Gold Anti-Trust Action Committee (GATA), a conspiracy group, said it will assist -- as ludicrous and without merit. JP Morgan Chase declined to comment.
"The Blanchard suit kind of got things rolling in the aftermarket, I suppose, which I can't figure out," said a bullion trader. "It's clearly a frivolous thing."
COMEX March silver was 2.5 cents firmer at $4.69 an ounce, trading $4.66-$4.79. Spot silver fetched $4.68/70, up from $4.65/67 late Wednesday. The fix was $4.72.
NYMEX January platinum was up 50 cents at $598.50 an ounce. Spot platinum was at $595.50/600.50.
March palladium was down $5.30 at $242.50 an ounce. Spot palladium was last at $238.50/246.50.