NEW YORK, March 27 (Reuters) - COMEX gold was supported by a weak dollar and fears of a messy and expensive war in Iraq but early business was stymied as traders waited for London over-the-counter options to expire.
April gold at 0934 EST was up $2 at $332.10 an ounce, trading off its high at $333.50 to $330.10. Spot gold fetched $331.75/2.50, up from $330.00/75 late Wednesday. London dealers fixed the morning spot reference price at $333.15 an ounce.
Spot prices were tethered to $330 an ounce, the closest major strike price for options holders. For the first half of the week futures were corralled around the same price before COMEX April options rolled off the books Wednesday afternoon.
But safe-haven interest remained intact amid financial markets jitters about the conflict that entered its second week and that U.S. President George W. Bush said was "far from over."
"I just hope the market wakes up, because it's been in a funk all week," a gold broker on the COMEX said.
The dollar fell to a 10-day low against the euro at $1.0744, making gold more affordable to European investors. The Dow Jones industrial average was down 88 points in early trade, amid perceptions that the war was not going as smoothly as expected by the Pentagon and many pundits in its opening days.
"The war is still dragging on. It looks like equities are a little bit lower and the dollar is weaker, so we should maintain some firmness," said a dealer at a precious metals trading house.
Physical demand from Asia, India and Middle Eastern buyers near the conflict has picked up since the shakeout in the overbought gold market pushed prices below the important $330 chart point last week. On Feb. 5 futures registered their fattest war premium, topping at $390.80 an ounce.
Crude oil prices are back up to near $30 a barrel, which makes gold attractive as an inflation hedge. But, like oil, gold prices have been very volatile, reacting to breaking news from the war.
May silver was up 1.2 cents at $4.41 an ounce, trading from $4.395 to $4.43. Spot silver was at $4.40/42, up from the close at $4.39/41. The fix was $4.4075.
NYMEX April platinum was down $8.90 at $629.00 an ounce. Spot platinum was at $633.00/638.00 an ounce.
June palladium was up $1.70 at $197.00, after falling to a contract low at $191 this week.
Spot palladium was at $192/202, near a 5-1/4-year low hit on Tuesday.