Bobby even now..USA under tremendous pressure due to Growing Trade Deficit...that is offsett for now by oil glut, however OPEC cannot stand idle and allow Oil price to stand that low...Even if Asian situation does not improve winter is coming..could be very cold
Gold stuck in range, shrugs off Canada sales news
11:47 a.m. Aug 06, 1998 Eastern
LONDON, Aug 6 (Reuters) - Gold remained locked in a range on Thursday in
late European trading, shrugging off news that Canada had sold 168,000
ounces, dealers said.
Gold was last quoted at $287.60/$288.10 an ounce, from the previous
close in New York at $287.70/$288.20. Bullion remained in a range
between $286.80 and $288.20.
Dealers said gold encountered difficulty breaking through $288.50.
''It is relatively quiet, there was a bit of selling pressure this
morning but it failed to move the market,'' one European dealer said.
He said he did not see much potential for gold to move higher, adding
that bullion shrugged off news that Canada had sold 168,000 ounces in
July.
Canada's Finance Department said on Thursday the country had sold
168,000 ounces of gold in July, boosting its foreign reserves by US$55.4
million.
Its holdings stood at 2.9 million ounces as of July 31, the department
said. It was the first sale of gold by Canada since October 1996.
The sale represented a reduction in the book value of Canada's gold
holdings of US$8 million, and an increase in the country's foreign
reserves of US$55.4 million.
Dealers said gold remained very muted and seemed to have ignored the
weaker yen in later trading on Thursday. Weakness in the yen has
directly hit dollar gold prices for weeks now, with bullion dealers
using the yen as a pointer to Southeast Asian gold demand.
''The dollar/yen has done nothing today,'' one London dealer said.
Dealers said even though the bullion market was relatively thin at the
moment, the news failed to make an impact.
''The price did not move at all. For a place like Canada which is a
natural gold provider...It highlights the fact that no matter what the
(World) Gold Council says, central banks will be quietly selling
still,'' another dealer said.
Gold tends to be negatively correlated with other asset classes and fell
to an 18 year low at $277.00 an ounce this year as the U.S. stockmarket
and the dollar have risen steadily in the past eight years.
But gold prices are not far from the marginal cost of production for
many mines and producer hedging and central bank activity has been light
in recent weeks, allowing gold to consolidate around current levels.
Gold prices are not seen recovering much ground until the slow summer
demand period passes for jewellery fabricators and until the September
and October Hindu festivals revive demand in India.
Silver was last quoted higher at $5.44/$5.47 an ounce against the
previous close at $5.40/$5.43, and dealers said the metal was struggling
to go above $5.50.
''If gold does not stabilise at the area where it is now, silver will go
down again,'' one dealer said.
Platinum and palladium moved higher in European trading. Platinum was
last quoted at $381.40/$383.40 against the previous close at
$375.50/$377.50.
Palladium was last quoted higher at $291.00/$301.00 against Wednesday's
$287.00/$297.00 New York close.
((Marius Bosch, London newsroom +44 171 542 8065, fax +44 171
542 8077. london.commodities.desk+reuters.com))
Copyright 1998 Reuters Limited. All rights reserved. |
