NEW YORK, Jan 23 (Reuters) - COMEX gold was softer Friday morning, but stranded in a range while New York speculative funds traded in other precious metals and took profits on a huge catch-up rally in palladium this week.
"New York is where the price action takes place," said a precious metals trader at a commercial bank. "It's probably a little further liquidation. If the stock market is good again, there might be some rotation (out of precious metals)."
February gold at 9:51 a.m. EST was off $1.10 at $411.40 an ounce. It traded from $413.00 to $408.00, stuck in consolidation mode after the retreat from the Jan. 6 surge to a 15-year high at $431.50.
Floor brokers said trade houses were doing most of the selling. February-April switch activity by speculators was also getting heavier, with the current active contract going into delivery in a week.
One gauge of speculators' bullish commitment will be how much of their long positions they roll and stick with, versus how much liquidation occurs before first notice day on Friday.
Spot gold was quoted at $408.80/0.00, off from the close at $409.20/9.80. London's late fix was at $411.40.
"Gold is a $405-$415 type of metal for now," said a second New York bullion dealer.
The dollar firmed to $1.2676/79 per euro from $1.2710/16 late Thursday. Gold has tended to track movements in the euro closely, peaking as the five-year-old currency was on its way to a record high at $1.2898 last week.
A sharp fall in the euro could discourage European gold buying and send bullion prices down toward $400 again, dealers said. A euro over $1.30 could restore gold's upward trend.
There is more wariness of buying gold since the German Bundesbank on Wednesday requested an option to sell 600 tonnes under any renewal of the agreement limiting central bank bullion sales. The 1999 pact is expected to be renegotiated for another five years, perhaps at next months Group of Seven meetings, before it expires in September.
Germany dropped hints last year of its desire to sell. Dealers are mainly interested in whether the current annual sales limit of 400 tonnes would be increased and whether the new deal would include more than the current 15 nations.
March silver was off 4.0 cents at $6.31 an ounce, paring Thursday's 14.2 cent gain. The range was $6.375 to $6.285, tight considering the volatility since silver fell from a six-year high set Jan. 12 at $6.795.
"At $6.15, you want to sell the smithereens out of it and next thing you know it's at $6.30," said the second dealer.
Spot silver was quoted at $6.29/31, off from the close at $6.33/35 and Friday's fix at $6.345.
NYMEX April platinum was off $2.70 at $859.50 an ounce. Spot fetched $862.00/867.00.
March palladium was down $9.35 at $245.00 an ounce, retracing Thursday's $14.20 rise. Spot was priced at $236.00/242.00.
A rise in platinum to 24-year highs has rekindled speculative interest in cheaper palladium as a substitute catalyst in automobile catalytic converters.
"The chunky stuff at the fixes seems like Russians on one side and investors on the other," said the bullion dealer. Russia is a top producer of palladium.