Gold for April delivery, the active month, was down $12.90/oz at $1,090.80/oz in 10:30 am EDT (14:30 GMT) electronic trading after sliding steadily from an overnight high of $1,106 but finding support near the $1,088-1,090 range.

Silver for May delivery, the active silver contract, also slid from overnight highs but found support near the $16.550 level. In 10:30 am EDT electronic trading, May silver was down $0.367/oz at $16.660/oz.

COMEX gold and silver mirrored the US dollar, which strengthened steadily overnight to reach the mid-$1.33 level against the euro from the mid-$1.34 level in early European trade. Much of the decline was attributed to the downgrade of Portugal's sovereign debt rating to AA- by ratings agency Fitch.

Portugal, along with Greece, Spain, Ireland and Italy have been under scrutiny by credit ratings agencies due to their high debt relative to GDP growth.

The downgrade sent European and US equity markets lower, a move reinforced in the US from news that new housing starts in February fell for the fourth consecutive month to a seasonally adjusted record low.

The dollar was also being helped by a drop in the British pound following the release of the Budget plan by Chancellor of the Exchequer (finance minister) Alistair Darling that called for a reduction in borrowing that would amount to 11.4% of GDP. The Budget comes just weeks before the election which must be held by June 3 or earlier.

"The pound sterling has taken a bit of a downturn following that, and the euro is weak," analysts James Moore of thebulliondesk.com said. "But there have been some encouraging signs for gold. We picked up some buying through the SPDR [Gold Shares] exchange-traded fund yesterday, and we're still finding some good buying interest on dips below $1,100," he said.

--Nick Jonson, nick_jonson@platts.com