London Gold Prices Firmer Amid Quiet Trade

Gold slowly drifted up yesterday, but its just nearer the top of its range. Theres supposed to be good selling just under $382, a London-based dealer said.

Bullion fixed at $381.00 an ounce compared with $380.10 on Monday afternoon and a London close of $380.15.

Prices moved about a dollar higher overnight on buying in New York and Asia, dealers said. But the market was still fairly bearish and cautious more than a month into a steep price decline.

Gold was in the midst of a minor technical correction, with the target at $381.70, said analyst Karen Jones of Credit Suisse. Above that level, $384 should cap the rise.

 

The upside at this point is limited and I still am quite bearish, she said. The break lower last week below $378.40 does not leave this market looking very healthy, Jones said.

Silver ignored golds progress and was unchanged from Mondays London close at $4.90 an ounce.

Silver is lagging behind gold on this, a dealer said. Theres a real lack of any sort of demand.

Silver seemed comfortable for now within its $4.84-$4.95 range, dealers said.

But Jones of Credit Suisse noted that the recent range trading had a bearish feel to it because silver had made little attempt to break out towards $5.00.

Platinum was quiet at $384.50 an ounce, up $0.10 from Mondays close. Platinum however, showed more scope than gold for a decent correction upwards, Jones said. Its sister metal palladium was $1.00 lower at $118.50.

Traders in Tokyo said the chronic surplus in Japans palladium market, which has depressed prices in recent months, would remain at least until the end of 1996 due to slack demand from the electronics industry.

Meanwhile, New York precious metals futures edged higher after the first hour of trade yesterday, as the complex continued to consolidate after a month long downtrend.

Funds are at a record net short position in the CFTC (Commodity Futures Trading Commission Commitment of Traders) data and the banks are finding it difficult to make any money at the levels we saw last week, so it looks like the market is getting set up for possibly a significant bounce, North American Equity Services floor trader John Geraghty said.

Comex December gold was up 80 cents at $383.40 an ounce, after trading in a $382.60-384.30 early range. In bullion trade, spot gold was quoted $381.10/381.60 an ounce.

Comex gold stocks fell 2,025 ounces Monday to 1,118,488 ounces, the ninth straight day of falls in warehouse stocks.

Comex December silver was up 1.7 cents at $4.905 an ounce, after trading in a $4.890-4.925 range.

Comex silver stocks fell 1,149,955 ounces to 139,493,089 ounces Monday.