''The market has been very focused on the yen/dollar. Nevertheless, what
we have seen over the past few days has been the first signs of gold
trying to break away from that influence,'' he said.
Gold and silver holding despite currency wobbles
11:40 a.m. Jun 26, 1998 Eastern
LONDON, June 26 (Reuters) - Gold and silver managed largely to hold
their levels through Europe's afternoon on Friday, despite pressure from
weakness in both the Japanese yen and the South African rand, dealers
said.
Gold fixed lower at $293.65 an ounce, down on the morning's $294.50,
after an options-inspired push towards $295.00 gave out under the weight
of currency-related selling.
Weakness in the yen and rand blighted gold and silver sentiment, the
first because of its effect on Southeast Asian demand and the second due
to fears of mine hedge sales from a major gold producing nation.
Rand weakness, which dealers said reversed amid market intervention by
both the U.S. Federal Reserve and the Bank of England, pushed local gold
prices to fresh 17-month highs just under 1,700 rand per troy ounce.
''We are probably at quite a critical stage for gold,'' said one London
dealer.
''The market has been very focused on the yen/dollar. Nevertheless, what
we have seen over the past few days has been the first signs of gold
trying to break away from that influence,'' he said.
''It's held very well at the bottom of its $292-$298 range and has been
pretty well bought on COMEX,'' he added.
Dollar/yen was last at 142.81/142.86, a level which when hit on June 16,
saw gold between $283.90 and $288.60.
Friday's expiry in over-the-counter options for gold and silver saw a
rally in gold ahead of the 1330 GMT deadline but little move in silver.
Spot gold was last at $293.00/$293.50 versus Thursday's New York close
of $293.60/$294.10.
Silver was last off its earlier highs at $5.40, trading at $5.30/$5.33
an ounce, five cents down on New York's close.
Palladium pivoted around $290.00/$300.00 an ounce, apparently unable to
digest Thursday's news that Russia might use a substantial tranche of
metal as security for a loan.
Analysts in Moscow and London said such schemes for Russia to borrow
billions of dollars against its precious metals would do little to
restore badly needed confidence in the economy.
Russia could look for much-needed funds by borrowing against its
precious metals reserves, they said.
Collateral-backed loans could mean fast money on good terms but analysts
questioned whether that would be a good idea.
''Anything like this is just piecemeal and it is not going to restore
confidence,'' said Peter Boone, co-director of research at Moscow
investment bank Brunswick-Warburg.
''You need at least $10 billion and signals that more is coming and more
is available if needed,'' he said, referring to hopes of a $10
billion-$15 billion package from the International Monetary Fund.
Russia has not officially exported any platinum or palladium so far this
year, causing prices to surge as markets anticipated a re-run in last
year's six-month export delay.
Platinum was last down $2.00 on New York, trading at $350.00/$352.00
while palladium was little changed at $290.00/$300.00.
((Patrick Chalmers, London Newsroom +44 171 542 8057.
london.commodities.desk+reuters.com))
Copyright 1998 Reuters Limited. |
