NEW YORK, Jan 27 (Reuters) - COMEX gold futures climbed on Tuesday on currency and options-related buying, as an ailing U.S. dollar helped the precious metal recover from an early fall toward the psychologically important $400 an ounce mark.
Silver prices rallied as the market responded more acutely than gold to euro strength versus the dollar amid signs of labor market softness in a U.S. economic report, traders said.
Gold for February delivery rose $3.40 to end at $410.10 an ounce, after patrolling a range of $403.10 to $412.40 and bouncing off of its weakest mark since Dec. 15.
Dollar softness, coupled with the role of Tuesday's COMEX February gold options expiration in propping prices above $400 where a clot of strike prices were located, helped gold shake off early pressure, dealers said.
"Once the dollar started to weaken, that played into the hands of the gold price," said Bernard Hunter, a director at bullion dealer ScotiaMocatta in Toronto. "The market ultimately was going to focus on $410, which is another popular options strike price."
"Gold may still go down and test $400 (support), but on the day, the dollar certainly stopped that from happening," he said.
A weak dollar typically promotes buying in dollar-denominated metal such as gold as it becomes cheaper to holders of foreign currencies.
The euro rose as high as $1.2652 , up from an earlier low at $1.2440, after a report showing U.S. consumer confidence improved in January though Americans were still having a tough time finding jobs.
Floor traders said speculative selling helped cap gold's rise, however, as funds chose to liquidate some long positions rather than roll into the April contract before February delivery next week.
Final estimated volume was a busy 150,000 contracts, with 21,047 switches.
February gold on Jan. 6 hit a 15-year high at $431.50. Traders currently view key technical support at $400, and then at $398, with resistance above $415.
Spot gold last fetched $409.75/0.50, versus Monday's late New York quote at $406.25/7.00. London's late fix was at $405.70.
COMEX March silver surged 24.3 cents, or 3.85 percent, to $6.555 an ounce, after trading from $6.255-$6.57, but it held off its Jan. 12, six-year peak at $6.795.
"It's rallying off the euro, and there was some light fund buying earlier probably off of technical indicators," a floor broker said.
Spot silver hit $6.53/55, against the previous close at $6.28/30. Tuesday's fix was at $6.24.
NYMEX April platinum rose $3.80 to end at $854.10 an ounce. Spot traded at $856.00/861.00.
March palladium climbed $4 to $244.00 an ounce. Spot touched $235.00/241.00.