NY Precious Metals Review: Gold Falls as UK Confirms Auction
<Picture>
Aug. 16-MAR--
[B] NY Precious Metals Review: Gold falls as UK confirms auction
By Darcy Keith, Bridge News
New York--Aug 16--COMEX Dec gold futures settled down 50c at $262.7.
Trading was mostly technical, although the UK's confirmation that it is
going ahead with its gold auction stirred up selling interest and silver
dealers were disappointment with Berkshire Hathaway's lack of disclosure
of its silver holdings.
* * *
Sep silver finished down 6.5c at $5.257 after a 2 1/2-week low of
$5.230.
Spot gold saw overnight weakness in Asia and this filtered through to
European and COMEX trading, said dealers. Spot gold's failure to break
resistance at $261 triggered a technical retracement and profit-taking.
COMEX gold saw most selling in the first hour of trading and activity was
lackluster thereafter, with some light buying interest emerging late in
the session.
An article in today's edition of Financial Times reported that central
bankers from some of the largest economies have warned the UK government
its decision to sell more than half its gold reserves may force them to
follow suit.
The paper said G10 central bankers made their views clear to Bank of
England officials during recent talks in Basle, Switzerland. (Story
.11162)
But the UK Treasury later played down the report, insisting that it
would not be deflected from its present course, and will go ahead with its
next auction of gold on Sep 21. (Story .11162)
There have been rumors that the UK may have been looking for
alternatives to the auctions, but today's UK Treasury comments dashed
those hopes. As such, the market is now reacting by factoring in the next
25-tonne gold auction, dealers said.
While gold has been making some modest headway in recent sessions, the
metal continues to be plagued by a lack of interest, and today's comments
by the UK Treasury and feelings the UK sale will lead to other central
bank selling is contributing to gold's moribund state.
"At some point we'll see some bargain hunting, but at what point, I'm
not sure," said George Gero, senior vice president of investments at
Prudential Securities. He said it is difficult to determine support levels
for gold amid the depressed trading conditions, although he noted that
$250 would be a key chart point.
One dealer said it is very difficult to determine where gold is
heading.
There is a massive supply deficit when looking at just mine output, but
there are concerns of big supply shocks coming from central banks. He said
there will eventually be an upward price correction, but for now the
market is quiet, and is likely to remain so at least until the next UK
gold auction.
Friday's Commodity Futures Trading Commission commitment of traders
report showed yet again that speculative shorts continue to dominate COMEX
gold positions. Nevertheless, short positions continued to head lower and
slipped 14% or 11,182 contracts to 70,336 since the las t reporting period
2 weeks ago. Speculative long positions increased only 1,648 contracts to
15,272. (Story .11483)
Silver followed gold lower today, but also reacted in disappointment
to Berkshire Hathaway's silence on its silver position.
The company released earnings Friday and a letter to shareholders over
the weekend that said nothing about the company's silver position. It said
the value of its disclosed portfolio of stocks fell 41.06 billion, or
3.9%, to $26.36 billion in the second quarter versus the first quarter.
(Story .16005)
"People were hoping Berkshire would say something about keeping its
silver holdings, but it said nothing," a trader said.
Sep silver's move down through support at $5.30 this morning triggered
some sell stops, accelerating the move to the downside, said traders.
Initial support is now seen at $5.10-15, one analyst said.
COMEX gold warehouse stocks were unchanged Friday at 948,973 ounces,
while silver stocks were down 1,274 ounces at 78,879,540 ounces.
Platinum and palladium were lower today on profit-taking as worries
continued about the timing of upcoming Russian shipments.
In platinum, traders continue to focus much of their attention in the
Oct contract month and are waiting for the rollover next month before
taking positions further out, said traders.
SETTLEMENT PRICES:
--Dec gold (GCZ9) at $262.7, dn 50c; RANGE: $260.8-263.5
--Sep silver (SIU9) at $5.257, dn 6.5c; RANGE: $5.230-5.325
--Oct platinum (PLV9) at $345.0, dn $3.4; RANGE: $343.0-348.0
--Sep palladium (PAU9) at $337.50, dn $1.35; RANGE: $334.00-338.75
SPOT PRECIOUS METALS PRICES:
New York London Tokyo
Gold (KRCGL) 259.90-260.40 259.20-259.70 260.25-260.75
Silver(KRCSL) 5.22-5.25 5.24-5.28 5.26-5.29
Platinum(KRCPL) 344.00-346.00 346.00-348.00 347.00-349.00
Palladium(KRCPA) 336.00-341.00 335.00-340.00 334.00-339.00
futuresource.com |
