Gold steadies in Asian afternoon after US$15 tumble
Fri March 14, 2003 01:34 AM ET
HONG KONG, March 14 (Reuters) - Gold prices found some support in Asia on Friday, but trade was choppy and nervous after the dramatic US$15 fall in earlier sessions in London and New York last night, dealers said.
"The market has swung so violently we have knocked out all the bears and now maybe all the bulls," said Ronald Leung, director at Lee Cheong Gold Dealers in Hong Kong.
The market was hovering just above its long-term support at US$330, and most traders expect the price to stabilise there in the short term.
Spot gold was trading at US$$333.30/3.80 an ounce at 0530 GMT, higher than the Hong Kong open at US$332.40/3.20 but still lower than New York's last quoted US$334.65/5.65.
Spot gold shed US$15 dollars overnight, chiefly on rumours that members of the Iraqi government were in talks or considering resigning and going into exile to avoid a war.
A rally in stocks on Wall Street and a dive in the euro, boosted the greenback, which in turn marked down gold.
Bullion has been in an almost steady decline since setting a new six-year high of US$388 on February 5. But the latest dramatic drop began last Friday, March 7, Leung said.
"We have fallen from US$358 to US$332. That is $26," said Leung.
One week after the start of the fall the market is still nervous and choppy, diving or soaring on rumours and unsure about the political, economic or market outlook, Leung said.
Tokyo trade was no different and yen-based traders were active in the spot market in the morning and on the Tokyo Commodity Exchange throughout the day.
At 0625 GMT, the Japanese yen was trading at 118.20/8.23, much weaker than its Thursday high of 117.00 yen to the dollar.
TOCOM benchmark February 2004 tumbled 38 yen to trade at a day low of 1,261 yen on robust trade of 97,960 contracts.
On Hong Kong's Chinese Gold and Silver Exchange, tael gold ended the morning session at HK$3,095 a tael, higher than the open at HK$3,093. A tael of gold is equal to 1.203 ounces of gold.
Spot silver was trading at US$4.53/4.55 an ounce, higher than the Hong Kong open at US$4.52/4.54.
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