Reuters Securities
COMEX gold ends down, support at $300/oz dissolves
NEW YORK, April 16 (Reuters) - COMEX gold slipped back under $300 an ounce Tuesday, tipping silver to a seven-week low, but held above last week's bottom as funds cashed in longs and money moved back into the stock market, dealers said.
Gold's safe-haven premium was eroded but its allure as a hard asset was only partially dulled as U.S. Secretary of State Colin Powell prepared to depart the war-torn Holy Land without a truce commitment from Israel or the Palestinians.
June gold (0#GC:) ended down $1.20 at $299.50 an ounce after trading $300.90 to $298.30, where it held above last Wednesday's low of $298 despite an attempt by dealers to run stop-loss sell orders expected below that level.
Estimated volume was a healthy 31,000 contracts.
``Funds were decent sellers, but we ended trying to rebound. Some talk about a cease-fire certainly helped weaken the market and also stronger equities,'' said James Pogoda, a vice president of precious metals at Mitsubishi International Corp.
Powell held what looked set to be his last meeting with Prime Minister Ariel Sharon after saying he was making progress, but might not be able to clinch a cease-fire agreement or an Israeli troop withdrawal from Palestinian areas before he leaves Wednesday.
On Wall Street, investors cheered benign U.S. inflation data and the strongest industrial production figures in two years by pouring back into stocks, taking the Dow Jones industrial average up 203 points by late afternoon and the Nasdaq up 60 points.
Other securities like U.S. Treasury bonds lost ground to stocks along with gold after reports showed factory output rose 0.7 percent in March, while the consumer price index rose a less-than-expected 0.3 percent.
``Of course the market wasn't helped by the very strong stock market all of a sudden, out of the clear blue sky,'' said an investment bank precious metals specialist. ``Some guys are saying that with energies (markets) being up they are an extra tax on the economy preventing some inflation. Maybe that didn't help the gold.''
Spot gold (XAU=) closed at $298.60/9.10, off from Monday's close at $299.60/0.10 but up from London's Tuesday afternoon fix at $297.75.
Active May silver (0#SI:) fell 4.5 cents to settle at $4.405 an ounce, still under pressure after a 14.3 cent drop on Monday. The traded range was $4.48 to $4.39, the lowest since Feb 26. Turnover was estimated at a fairly brisk 19,000 contracts.
Spot silver (XAG=) was last at $4.41/43, down from $4.45/47 late Monday. It fixed at $4.46.
``Silver needs what I call a cowbell. You need somebody like a guru to say 'I bought silver' and then everybody climbs on board,'' the investment banker said, reminiscing about the 1997-1998 rally after billionaire investor Warren Buffet bought 130 million ounces of silver.
``Silver has actually been basically following gold and just has a tough time getting out of its own way,'' the dealer said.
NYMEX July platinum (0#PL:) rose $4.30 to $535.30 an ounce. Spot platinum (XPT=) closed at $534/539.
Prices went up even though workers at Anglo American Platinum's Rustenburg precious metals refinery in South Africa went back to their jobs on Tuesday after calling off a strike over medical benefits.
One refinery dealer said speculators thought platinum was a bargain in the low $530s with prospects for another strike in May still clouding the supply outlook from the world's largest platinum producer.
June palladium (0#PA:) rose 65 cents to $369.65 an ounce. Spot palladium (XPD=) was last quoted $362/372.
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