Do you think dollar is going to get wacked on Kosovo deal? Gold 301?
Gold firms on inflation talk,
commodities uptick
11:40 a.m. May 06, 1999 Eastern
LONDON, May 6 (Reuters) - Gold
firmed during late European business on
Thursday, helped by fund short covering
on U.S. inflation fears, Australian
currency strength and tentative
bullishness in commodities generally,
dealers said.
Silver, platinum and palladium rose as
well, the former helped by
short-covering rallies in copper and
aluminium.
London gold fixed barely changed at
$287.95 a troy ounce in the afternoon,
down on the morning's $288.10.
Dealers said gold drew strength from
Thursday's warning by U.S. Federal
Reserve Chairman Alan Greenspan that
a tightening jobs market could fuel
inflation and threaten the economy.
''The performance of the American
economy over the past seven years has
been truly phenomenal,'' Greenspan said
in prepared remarks released in
Washington.
But he added: ''There are imbalances in
our expansion that, unless redressed,
will bring this long run of strong growth
and low inflation to a close.''
''It's a bit more positive,'' said one
London bullion dealer who confessed to
a sneaking affection for gold following
months of coolness.
''It's an unfamiliar coat to be wearing,''
he said in reference to his measured
bullishness.
Gold's challenge would be to attract
fresh buyers if fund short sellers covered
positions and took their money
elsewhere.
''The difficulty in this market is
expanding the participation once you
have got the shorts covered. It's a small
constituency,'' the dealer added.
Another factor helping gold was the
Australian dollar's rise to near 13-month
peaks on upbeat Australian economic
reports, making miner hedge buybacks
more likely than forward sales.
Spot gold was last at $288.30/$288.90
versus New York's $286.90/$287.40
Wednesday close.
Spot silver rose, though less
enthusiastically, adding three cents to its
New York close of $5.37/$5.39 to hit
the familiar level of $5.40/$5.43.
Palladium's volatile trade continued on
Thursday with a $20 jump in early
Europe, with one dealer saying funds
covered short positions on the Tokyo
exchange by buying spot metal in Zurich.
It dipped before climbing again later to
be last at $314.00/$319.00 versus its
U.S. close of $291.00/$296.00.
Platinum was also higher at
$356.50/$358.50 from its
$351.00/$353.00 close.
((Patrick Chalmers, London Newsroom
+44 171 542 8057.
london.commodities.desk+reuters.com))
Copyright 1999 Reuters Limited. |
