UPDATE 4-COMEX gold tips up with bets in before Bush speech Updated Tues 1/28/2003 16:33 EST
(changes dateline-previous LONDON, releads, updates with closing/COMEX prices, new quotes) NEW YORK, Jan 28 (Reuters) - COMEX gold ended with modest gains after trading lower all day, as traders tried to sort out the best position to hold going into President George W. Bush's address on Tuesday night in anticipation of any message it might carry regarding possible military face-off with Iraq. Traders said the late buying spree and gold's ability to hold near six-year highs even at session lows was evidence of gold's strength. It may need to correct its steep gains to move much higher, but it still has potential to the upside. "The fact that it's holding the high $360's, it's showing a sign of strength. Initially, it looked like it was going to crack even further down than the $365 area. But, it has a nice bounce," said Scotiamocatta Toronto director George Parrill. Active February futures <GCG3> on the New York Mercantile Exchange's COMEX division finished $0.60 higher at $370.0 an ounce, trading from $365.50 to $370.20. While the contract closed off the highs the price was still near six year highs. Final COMEX gold volume was estimated at 90,000 contracts, less than the hefty final tally Monday of 101,802 lots. Spot gold <XAU=> was quoted late in New York at $369.50/0.25 an ounce, a slight improvement over Monday's $369.20/0.00 an ounce close. The gold fix came in at $368.40. Parrill added that gold players mostly maintained a "wait- and-see" attitude on Tuesday ahead of the Bush speech. "It was wait and watch the speech. It's a market that could go either way -- meaning correct or go higher, depending on what happens with the major events as they unfold," said Parrill. President Bush will deliver his annual State of the Union address on Tuesday night at 2100 EST/0200 GMT. While analysts said the speech is expected to focus mainly on U.S. domestic programs and the economy, they also expect Bush to use it to prepare anxious Americans and skeptics in the global community for possible war with Iraq. Gold participants will be looking to the State of the Union address as one piece to determine whether war seems imminent. Bush was not expected to present new evidence to support his case against Iraq, announce a decision to go to war or set a deadline. But the speech will be critical to his attempt to marshal backing for military action. Gold investors will be keenly watching for any message indicating the Bush administration's near-term intentions regarding Iraq, even though longer-term goals seem clear. One New York trader said: "I think you're going to continue to see choppiness for the next few days. If there is a definitive result that seems like we're going to war, the market will shoot higher. If it seems definitive that we'll bide some time we're going to correct a little bit." Bush's speech comes just one day after Chief United Nations weapons inspector Hans Blix delivered a double message following a 60-day inspection of Iraq's arms cache. In his brief, Blix sharply criticized Iraq for not giving enough evidence on its past weapons program, but said the omissions could not lead him to conclude Baghdad had prohibited arms. Furthermore, on Wednesday, the United Nations Security Council discusses the Blix report on Iraq's arms situations. And, on Friday, Bush meets with British Prime Minister Tony Blair in a strategy session on Iraq. All three events will keep gold investors on edge |
