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By Jon Nadler

Overnight gold trading was fairly subdued, with prices meandering between $918 and $929 as participants observed rising equity markets (the Nikkei added 378 points) and softer dollar and oil prices ahead of the weekend.

Standard Bank analysts believe the trade might lighten up on positions ahead of the G 7 meeting as it is a potential risk event.

On the other hand, a growing number of market observers feel that the meeting will not result in any officially telegraphed dollar supportive statement. Perceptions are that the greenback is merely exhibiting the economic realities at home. Guess who is rooting for a recovery? China, which now sits on $1.6 trillion little green bills in reserves.

New York metals trading opened on a steady note this morning, with gold not exhibiting much of any book squaring sales or pre G 7 easing. At last check the yellow metal was quoted at $928.90 per ounce unchanged but near the top of the overnight range. Participants will once again seek directional signals from the dollar (back down to 71.74 on the index) and oil (down to $109.80). Silver rose 12 cents to $18.07 and platinum lost $3 to $2023. Palladium however, gained $6 to $469 per ounce.

Worries that the G 7 meeting may turn out to be a dud and little more than a photo and dining opportunity had the dollar under pressure this morning while gold rose to better than $932 shortly after the open. The meeting should have looked like a marathon of ideas and collaboration complete with rolled up sleeves. There is plenty to address. However, as Bloomberg reports, even though something concrete is expected out of this summit, the post mortem reality may turn out to be a let down:

There are still measures that central banks could take together, such as buying mortgage backed assets, allowing foreign banks to borrow from them, and having others follow the Fed in lending short term government securities, said Geoffrey Yu, a foreign exchange strategist at UBS AG in Zurich.

``Further targeted action on a significant scale is needed over a long period of time to restore normality, said Yu.

Trichet said yesterday that there are no plans for the ECB to purchase mortgage backed securities.

Greater coordination is unlikely because each G 7 economy is in a ``different position, with the U.S. threatened by a recession and Europe fighting the highest inflation rate in almost 16 years, said Carl Weinberg, chief economist at High Frequency Economics in Valhalla, New York. ``It's hard to imagine coordinated rate cuts or fiscal policies.

Turning to currency markets, where the dollar this week slumped to a record against the euro and in March reached a 12 year low versus the yen, G 7 officials may agree to disagree, analysts said. The dollar's slide raised concern among European and Japanese officials about damage to their exports. At the same time, it has helped the U.S. economy avoid a deeper downturn, and Europe to escape even faster inflation.