New York 30/03/2012 - Gold futures ended the quarter on a positive note with some last-minute window dressing and a stronger euro lending support to the precious metals complex.

Gold for June delivery on the Comex division of the New York Mercantile Exchange ended up $17, or about one percent, at $1,671.90 an ounce. The yellow-metal posted a six percent return in the first quarter.

“The majority of gains [this quarter] were the direct result of [doveish] comments from the Fed,” a US-based trader said. “There's a lot of noise out there, especially coming out of China and Europe, but the reality is that the price of gold has become a reflection of US monetary policy.”

In January, the Federal Reserve pledged to keep short-term interest rates close to zero through late 2014 and then last week Fed Chairman Ben Bernanke said that additional accommodative policies might be needed to further improve the labour market.

A new round of quantitative easing (QE3) would be unequivocally bullish for gold because cheap money tends to debase the dollar and create future inflationary risk.

In today's trade, gold found support from funds and institutional investors that bought precious and base metals in order to tidy up their portfolios before sending out their quarter-end reports to clients, sources said.

In news, eurozone finance ministers raised the region’s the two rescue funds (EFSF/ESM) to 700 billion euros, with an additional 240 billion euros that can be used in emergency situations, through to mid-2013.

While the promise of extra liquidity clearly helped gold and the euro, which was last up about a third of a cent at 1.3340 against the dollar, the steady creep of Spanish and Italian bond yields has kept traders' enthusiasm in check.

“Gold tiptoed higher staging a cautious mini-recovery in the recent downswing. Despite a [small] gain, gold’s trade looked very much range bound,” MKS Finance said in note.

“This weekend all eyes will be on the Chinese PMI data, which has a great potential of providing some price direction for the metals. Should the index come in above 50 a stabilization of prices may occur,” MKS added.

Elsewhere, US data was neutral to mildly positive, with US personal spending increasing 0.8 percent from a revised 0.4 percent in January and beating expectations of a 0.6-percent rise.

Additionally, the Thomson Reuters/University of Michigan's consumer sentiment final reading for March rose to 76.2, a one-year high, from 75.3 in February.

In gold specific news, Indian gold merchants extended their strike to a 13th day to protest against a government plan to double gold coin and bar duties to 4 percent. The country's gold demand reached 933.4 tonnes in 2011, making it the world's largest consumer, according to the World Gold Council.

As for the other precious metals, Comex silver for May delivery settled up 49.2 cents at $32.484 an ounce. Trade ranged from $32.175 to $32.625.

Platinum for July delivery on the Nymex ended $15.80 higher at $1,644.10 an ounce, while the June palladium contract was at $654.10 an ounce, up $9.55.