NEW YORK, Aug 24: COMEX gold dipped to a 22-day low on Friday but closed unchanged after a retreating stock market and softer dollar derailed the sell-off and traders finished covering positions before a UK market holiday on Monday.

A little book squaring. It didn’t take much to get anything going today, said a bullion trader. The longs squared up and drove the market down, then shorts squared up and brought it right back up again.

December gold settled flat at $308.30 an ounce, trading from $308.70 to $305.60, its lowest since Aug. 1, when the contract bottomed at $300.30.

Spot gold was last at $306.75/7.25, just off Thursday’s close at $306.95/7.45 and up from the late fix in London at $305.95.

Gold is still up 9 per cent on the year and physical demand offers protection before the 4-1/2 month low hit early this month.

But it has fallen sharply from 2-1/2 year highs above $330 in early June, when the stock market was plumbing five-year lows and the dollar was swooning.

The festival season is getting under way in India, the world’s largest bullion consumer. This is a time of year when demand for gold peaks. But a weak monsoon this year has hurt incomes in many rural areas, which buy most of the gold for jewelry and religious objects.

A steadier dollar undermines the bullion purchasing power of overseas investors while Wall Street’s rebound dulled the allure of gold as safe-haven portfolio insurance.

The $305 area looks like a base, but in illiquid summer markets that base could easily be broken, dealers said.

There are no magic numbers, and if there are I am not sharing them anyway, confided a bullion bank dealer. I have my magic number, but I’m not interested in broadcasting it.

US saber rattling against Iraq has investors jittery about wealth preservation in the case of a US war in the Middle East, which could favor gold.

Likewise, higher oil prices are also adding some support on the margins, although there is little worry at the moment about an inflation spike.

Spot silver was quoted $4.41/43, down from $4.46/48 late Thursday. Friday’s fix was $4.44.

NYMEX October platinum rose $1.30 to $546.20 an ounce. Spot platinum was at $542.50/547.50.

September palladium was up $1.50 at $322 an ounce. Spot last fetched $318/330.—Reuters