Thursday February 15, 11:15 am Eastern Time
Sluggish gold falls through support to probe new low
LONDON, Feb 15 (Reuters) - A combination of a sluggish physical market and continuing dollar strength battered gold down to fresh 16-month lows in Europe on Thursday.
``A lack of support form the physical market and recent dollar strength suggested that this level ($259) could easily be swept aside. In the absence of any other impetus we look for gold to drift between $259/$261,'' said one analyst.
The afternoon gold fix was set at $258.55, the lowest since September 21, 1999 when it was fixed at $255.20 a troy ounce, and erasing an earlier low set in the morning fix at $259.50.
By 1600 GMT spot gold was quoted at $258.10/$258.70 from a Wednesday New York close at $259.75/$260.25. The price was seen heading towards $255 and then $252.
``At these levels, unsurprisingly, the producers will be getting extremely nervous, especially those with smaller hedge books in place,'' said a dealer.
``This time there is little chance of a central bank announcement along the Washington Agreement lines, so what else can lift this market?''
Any rallies from short covering or physical buying -- which was seen quiet -- would be limited, traders said.
Silver was also looking vulnerable, fixing at a six-week low at 451.50 cents.
``There's only limited physical buying here on the silver at the moment, so I think it will see $4.50 again,'' said the trader. ``Break that, and $4.25 is the next key figure.''
Spot silver was last unchanged at $4.52/$4.53.
In the platinum group metals (PGMs), palladium reversed early losses to be quoted at $975.00/$995.00 from Wednesday's close at $970.15/$990.15.
The metal has been losing ground over recent sessions amid Russian sales of the metal. Forward rates are also easing, with one-month metal at nine percent, sharply down from end-January's 22 percent. Three months was also at nine percent from 20 percent, and one-year metal was at 10 percent from around 18 percent at the end of last month.
But dealers said prices could remain buoyant until the market sees the metal against those sales.
``We are still waiting for confirmation of export deals,'' a dealer said.
Platinum lease rates were also down, but only slightly, with one month at nine percent from 11 percent.
Spot metal was at $595.50/$601.50, just up from $594.40/$597.40.
biz.yahoo.com |
