Dec 2003 11:49 ET ODJ NY Precious Metals Midday: Feb Gold Hits Fresh High
-- More Gains Allowed For As Barrick News Buoys Sentiment
-- Silver Firm But Holds Below Recent Highs, Platinum Hits $780
By Gavin Maguire
New York, Dec. 2 (OsterDowJones) - Comex Feb gold futures trade remained
turbulent Tuesday, allowing prices to inspect the quality of support in place
around $400 per ounce before hitting fresh contract highs of $407 amid the
prevailing light conditions.
The steady start to the equity and U.S. dollar markets brought about the
early retreat as some dealer and fund profit taking emerged.
However, the renewed weakness in the U.S. currency as the session wore on
brought a halt to the early gold profit taking and at the same time ushered a
fresh round of gold buying - driving spot gold prices to their highest level
in 12 years of $405.88 in the process.
Also driving prices higher was news that U.S. gold miner Barrick Gold
Corp. remained committed to reducing its hedge book over the next 10 years.
Bullion bank sales and further spots of fund profit taking did emerge at
the higher levels to slow the ascent and trim gains. But dealers said the
market will remain prone to further spurts higher over the coming days.
"The funds have got the bit between their teeth so this market is quite
capable of hitting $420 in these conditions," said a dealer with a large U.S.
investment bank.
"But eventually the U.S. dollar will stage a recovery and that could be
the cue for many funds to take profits," he cautioned.
"Also, with the year-end coming soon there'll be pressure to produce
strong year-end reports so that's another reason to take profits soon."
By 1140 ET (1640 GMT), however, buyers remained in the driver's seat, with
Feb futures quoted around $405-$406.
Mar silver was supported by gold's renewed strength but failed to break
onto new ground and held within a $5.425-$5.545 range throughout.
Dealers said profit taking in the $5.55-$5.58 region will likely make the
$5.60 level very tough to overcome over the near term. But should gold manage
to make a break toward the $420 area, silver should muster increased strength
that could lead to a more concentrated assault on $5.60 and beyond, they added.
By 1140 ET (1640 GMT), however, volatile conditions prevailed as spurts of
profit taking emerged, leaving Mar to be quoted around $5.49-$5.50.
Nymex Jan platinum was buoyed by the strength on show elsewhere and pushed
briefly to a fresh contract high on $780 in the process.
However, as was seen elsewhere profit taking also emerged and a broad $770-
$785 range has been allowed for over the rest of the day.
Mar palladium was also trading higher, at $196. A $190-$200 range was seen
prevailing over the near term.
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Gavin Maguire, OsterDowJones, (646) 364-0959
gmaguire@osterdowjones.com
Copyright 2003 OsterDowJones Commodity News (ODJ). All rights reserved.
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