Gold edgy on stock losses, silver soft
LONDON, Oct 28 (Reuters) - Gold prices remained edgy on Tuesday after recent falls, while silver and platinum dropped on the back of lower projected demand due to worldwide stock losses, traders said.
Gold fixed at $312.35 per ounce in the afternoon, losing firmness from the morning's $313.75 as sellers came back into the picture.
Gold showed little indication of knowing which way to go through Tuesday, moving from an early bid tick of $308.90 in Asian trading to an intra-day high of $313 and $314 with three-dollar swings along the way.
Analysts and dealers reported evidence of producer selling even at these levels, hardly a confidence booster for a bullion price just off 12-year lows.
''The producers are concerned about what happens next and the idea of $280.00 is seen as a
distinct possibility,'' said markets analyst Kamal Naqvi of Macquarrie Equities Ltd.
A short-term rally to $315-$320 would probably bring in hedge selling as producers either increased the percentage of production hedged or extended their existing hedges, he said.
Firmer gold bullion prices earlier on Tuesday were put down to short covering, some dealer interest and physical buying, especially from India.
Bullion dealers kept their eyes fixed on stocks, with Asian losses knocking on to European and then North American markets.
''Everybody's watching the Dow,'' said one dealer in reference to the U.S. Dow Jones Industrial average, which lost 170 points to under 7,000 soon after opening, before regaining ground.
''The (gold) market does look very overdone so we could try a little bit higher,'' said the dealer.
Silver and platinum were hit hard by stock losses, a measure of their status as pure commodities compared with gold's more peculiar role as official reserve store and sometime safe haven.
With equities drooping, demand for silver from the electronics and photographic industries comes into question, while for platinum the same effect could hit demand from car catalyst makers, the main users.
''The other precious metals were down on lower-than-expected industrial demand,'' one dealer said.
Silver dropped to $4.72/$4.74 by 1530 GMT, down 13 cents on its previous London close, with platinum also suffering at $396.00/$398.00, down $8.00.
Palladium blithely ignored the activity elsewhere, holding steady at $201.00/$203.00, down $2.25. |
