New York Metals Futures Get a Boost from Fund Buying
futuresmag.com
New York-Jan. 13-FWN--Fund buying boosted prices of all the precious metals here Tuesday, enabling the entire complex to finish sharply higher, sources said.
Gold and silver futures were firmer for the entire pit session, then surged to their highs for the day in the final hour of trade. Floor sources in both pits said fund buying entered the markets.
"We were getting some fund buying out of a company by the name of Schnell," said a gold dealer. "They came in buying for Republic Securities. That's what pushed the market quite a bit higher off the morning's opening. There is an undertone of buying on the dips. The silver market has kind of led the way."
February gold settled into good resistance, which this floor source listed as $283.50 to $284. The final level was $283.80, up $4.90 for the day. Had the market closed above $285, he would have been looking for a move to $290 to $292.
March silver got a bounce early in the session in the aftermath of a steep retreat over the last week. Then, during the afternoon, fund buying helped push the position to a 21-cent gain for the day.
"It looks like there was some good fund buying here pushing us up a bit," said a silver floor source. "Dean Witter (Carr Futures Inc.) was a good buyer. And Emerald, which does a bunch of funds, was also a good buyer."
He listed resistance for March silver around $5.74. Support was put at $5.62, then $5.54.
While nearby gold, silver and palladium futures all spent the entire day in positive territory, April platinum was lower for a good portion of the session before moving to higher ground. One trader said a news service carried a story in which Kremlin officials indicated Russian platinum exports would be put on hold.
"That seems to have driven it up," continued the trader. "It (the price spike) happened a little while after that was released, so I think it was absorbed into the marketplace and it reacted accordingly. We haven't heard of anything else but that. That seems to be the driving force."
Still another contact added that the recent steady increase in palladium prices also began having an influence on platinum futures. Palladium futures have been moving sharply higher in recent days, with dealers and analysts citing worries about Russian supply.
The March contract spent a good portion of Tuesday at its $12 limit-up level at $236.40. This was the third straight day that palladium finished limit up -- first settling at a $6 limit up Friday, then at the extended $9 limit up Monday, and finally at the further extended $12 limit up Tuesday.
As the market rose first thing Tuesday, one trader said funds had been waiting for their chance to buy but had been continually running into a limit-up level. Tuesday, they were getting their chance to do some buying due to the higher spending limit, he explained.
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