Gold continues quiet into U.S. trade, held by dlr
10:37 a.m. Mar 30, 1998 Eastern
LONDON, March 30 (Reuters) - Gold held firm above $300 on Monday but the
strong dollar meant it made scant effort to move into the higher ranges
dealers and analysts had earlier predicted for the coming week.
Gold fixed at $301.85 an ounce in the afternoon versus the morning's
$302.20, with dealers describing trade as lifeless.
''It's just remarkably quiet, there's no real direction at the moment,''
said one dealer.
While gold was flat through much of the European day, platinum group
metals stirred from lows hit during Asian trade, gaining in both Europe
and U.S. trade to climb back near their closing levels in New York on
Friday.
Silver continued its choppy trade, dropping to $6.31 an ounce bid before
rising to be last quoted at $6.39/$6.42.
The strong dollar capped the positive sentiment generated by last week's
positive New York close for gold, which left the market expecting higher
levels still through this week.
Dollar strength against key gold producer currencies such as the
Australian dollar and South African rand saw local gold prices rise to
five-month highs.
In Australian dollar terms gold lifted to more than A$456.00 an ounce,
the high since October 28, while in South African rand it was at 1,516,
the high since November 5.
But one dealer doubted the new levels would bring on significant waves
of fresh producer selling.
''Any Australian stuff that needs to be done has already been done. We
need more like A$500 rather than A$450,'' she said.
''As for the South Africans, so many seem to be going through major
changes that their attention seems to be on the internal stuff rather
than hedging,'' she added.
Producer sell orders were likely to have been moved higher since gold's
rise through $300, she said, suggesting $306 and $309 as likely trigger
points.
Gold's subdued performance came after sentiment had appeared to be more
positive after last Friday's expiry of the monthly over-the-counter
(OTC) options and a subsequent move to $304.40 bid, the high since
January 30.
''Traders are talking of a test of $310 an ounce this week, however, we
are cautious about the longevity of this rally given the likelihood of
producer hedging and the lack of change in the fundamentals,'' precious
metals analyst Kamal Naqvi of Macquarie Equities said in his weekly
report.
Commitments of Traders data released late Friday by the U.S. Commodity
Futures Trading Commission showed funds' net short positions in gold at
42,151 contracts as of March 24, higher than two weeks earlier.
Gold was last at $302.30/$302.80 versus its previous New York close of
$302.60/$303.10.
Silver was last trading choppily at $6.39/$6.42 as against $6.35/$6.38
at New York's Friday close.
In the platinum group metals, early losses incurred as Tokyo factored in
Friday's news that Russian President Boris Yeltsin had signed the 1998
budget were gradually recouped during European and U.S. trade.
Platinum group metals are sharply higher this year in the absence of any
exports from Russia, causing the market to fear a repeat of last year's
six-month Russian supply freeze.
Platinum was last quoted at $409.00/$411.00, still down on New York's
Friday close of $413.50/$415.50.
Palladium showed a similar pattern, up in Europe at $267.00/$269.00 but
well down on New York's close at $271.80/$273.80.
((Patrick Chalmers, London Newsroom +44 171 542 8057.
london.commodities.desk+reuters.com))
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