Wednesday June 6, 5:58 am Eastern Time
Palladium at new lows, gold steadies in Europe
LONDON, June 6 (Reuters) - Platinum group metals (PGMs) continued to come under near-term downside pressure in Europe on Wednesday with palladium touching new lows, while gold was steadily holding its recent
range, traders said.
Palladium dipped slightly to fix in the morning at a fresh 11-month low at $627 an ounce, the lowest fix since July 6, 2000 when it was set at $623. ``It's been slowly coming down for a while now, it's nothing new, and we expect parity soon,'' said one trader, referring to market expectations that the price would soon come into line with platinum, close to $600. By 0950 GMT spot palladium was quoted at $615.00/$635.00 versus $620.00/$635.00 at the last close in New York. Platinum was at $582.00/$587.00 against $582.00/$589.00. ``You must also remember that the market is so thin that any moves will look exaggerated,'' said another dealer. With speculative long liquidation continuing in platinum, the PGMs were expected to remain under pressure. Once the speculative selling ends, platinum -- and palladium in sympathy -- could recover some of its losses, analysts said.
GOLD NEUTRAL
Following on from the tests of the $265 support in the last session, gold firmed modestly in Asia overnight on the back of a jump in the Australian dollar , prompted by stronger-than-expected first quarter GDP figures. ``Similarly this morning, gold has benefited from euro short-covering (following rumours of intervention yesterday),'' said one analyst.
``Given that support at $265 has held well after a number of tests of the downside, gold has built up a reasonably solid base at these numbers and could perhaps test the upside. That said keep an eye on the currencies for gold's direction.'' Spot bullion was last at $266.50/$267.00 against $266.10/$266.60 at the last close in New York. With gold equities rallying over the last few days despite gold being stuck in its range, some analysts have said the recent price move was preceded by a move in gold equities.
``Although we remain to be convinced by this logic, it is another potential supportive factor for gold bullion,'' said analyst John Reade at UBS Warburg. He added that implied volatility continued to decline and was now close to the levels where it was before the move a month ago. Forwards have eased slightly with the one-month rate last quoted at 1.9 percent although trading remains very quiet. ``We remain `neutral' towards gold and we expect that the yellow metal will remain between $265 to $269 awaiting fresh direction. The longer that gold remains in this range and the more speculative longs exit the market the better the outlook will become for gold,'' Reade said ``We feel that the bias is improving.''
Silver was now back in its recent range and further liquidation may see the metal trade down towards $4.30, though traders expected it to consolidate around current levels in the near term. ``Physical demand should see the $4.25 area holding in the short term,'' said one trader. Spot was last at $4.35/$4.37, up from $4.34/$4.36. |
