NY Precious Metals Review: Aug Gold Dn $1.1; Others Edge Lower
Jun. 16-MAR--
[B] NY Precious Metals Review: Aug gold dn $1.1; others edge lower
By Melanie Lovatt, Bridge News
New York--Jun 16--COMEX Aug gold futures settled down $1.10 at
$259.90 per ounce after edging to a 5-day low of $259.70. Gold came under
pressure from the dollar's climb against the euro and a climb in bonds and
equities. Gold was also made nervous by talk from the Central Bank of
Russia that it intends to spend forex reserves, which include gold, to
support the ruble (story .16007).
* * *
Whether any gold from the country's reserves will actually be used to
support the ruble against the dollar remains to be seen. Nevertheless,
while there is skepticism that Russia will actually carry out this plan,
it still pressured gold prices today, noted Leonard Kaplan, chief bullion
dealer at LFG Bullion Services.
"Currently it is very important for us to keep the ruble stable, and
the CBR is ready to spend its reserves to support the ruble," said Central
Bank of Russia chairman Viktor Gerashchenko at the annual International
Economic Forum in St. Petersburg, as quoted by the Prime-Tass news agency.
Meanwhile, "daily fundamentals" were negative for gold, said Bill
O'Neill, analyst at Merrill Lynch, pointing out that equities and bonds
climbed, while the Commodity Research Bureau index edged lower. Gold was
also pressured by the dollar's climb against the euro, although its
decline could have been steepened if the dollar had also climbed against
the yen. Instead the pair largely moved sideways.
Today's US May CPI figures, which were lower than expected and
unchanged from April, showed "there is virtually no inflation threat, even
though the Fed has expressed concerns," O'Neill noted.
Gold's typical role as an inflation hedge means that prices often climb
during times of high or rising inflation.
O'Neill said that gold continues to show an erosive pattern of "lower
highs and lower lows."
Kaplan notes that gold was unlikely to see a turnaround unless the
dollar makes a steep fall against the yen or euro and if lease rates start
to climb higher. "If the dollar stays strong we are heading lower--gold is
in a bear market, but only in dollars," said Kaplan.
He said that as the first UK Treasury auction, set for Jly 6,
approaches "volatility will die a little more each day."
He expects gold will see the "year's bottom" just before the UK auction
auction. "It will be a classic case of sell the rumor buy the fact," he
commented.
Meanwhile, Jly silver settled down 1.7c at $5.033 per ounce after
falling to a 1-week low of $4.995. It extended Tuesday's and Monday's
slide, but after a brief dip below $5, it managed to edge back up slightly
above this psychologically important level. Silver tumbled Tuesday on
disappointed liquidation after its failure to hurdle $5.15 Monday. Traders
said that players had started to become disillusioned that it had failed
to push up to $5.25 strike levels ahead of Friday's option expiration.
Platinum also edged lower today as locals continued to try and force
out funds who had gone long at the recent price crest, said one trader,
although he noted that trade was thin.
"Last week platinum looked good and this week it looks bad and people
are talking about the $350 level," he commented. However, he noted that
after the recent price dips, both platinum and palladium have been seeing
some good "scale-down buying" from consumers.
Palladium prices had dipped last week on rumors that giant macro hedge
fund Tiger Management had sold some of its palladium. However, prices have
started to stabilize after a source close to Tiger told Bridge Tuesday the
company views palladium as a buy at current prices.
"While the people who understand palladium weren't swayed by the
initial talk of Tiger sales, the latest information didn't hurt," said one
trader.
Platinum 1-month lease rates stayed firm at 7-7.5%, while in palladium
they were at 6.5-7.5%.
--Aug gold (GCQ9) at $259.9, dn $1.1; RANGE: $260.8-259.7
--Jly silver (SIN9) at $5.033, dn 1.7c; RANGE: 5.045-4.995
--Jly platinum (PLN9) at $353.7, dn $2.5; RANGE: $357.2-353.5
--Sep palladium (PAU9) at $337.0, dn 65c; RANGE: 338.0-335.2
SPOT PRECIOUS METALS PRICES:
Late New York London Tokyo
Gold (KRCGL) 258.10-258.60 258.50-259.30 258.20-258.80
Silver (KRCSL) 5.04-5.07 5.00-5.04 5.02-5.05
Platinum (KRCPL) 354.00-363.56 355.00-357.00 355.50-357.50
Palladium(KRCPA) 336.00-341.00 336.00-341.00 337.00-342.00
For an intraday chart of active-contract gold, double-click:
Media://analytics::/cmd=us@GC.1[1099ID;3;2]
For a 1-year chart with daily moving averages, double click:
Gold: Media://analytics::/cmd=us@?KRCGL[1350MOVB]/VP
Gold: Media://analytics::/cmd=us@GC.1[1350MOVB]/VP
Silver: Media://analytics::/cmd=us@SI.1[1350MOVB]/VP
Silver: Media://analytics::/cmd=us@?KRCSL[1350MOVB]/VP
Platinum: Media://analytics::/cmd=us@PL.1[1350MOVB]/VP
Palladium: Media://analytics::/cmd=us @PA.1[1350MOVB]/VP
Platinum: Media://analytics::/cmd=us@?KRCPL[1350MOVB]/VP
Palladium: Media://analytics::/cmd=us@?KRCPA[1350MOVB]/VP
For an intraday chart of active-contract gold, double-click:
Media://analytics/pages:active-gold-intraday:/cmd=us@gc.1[1099ID;3;2]
For an intraday chart of active-contract silver, double-click:
Media://analytics/pages:active-silver-intraday:/cmd=us@si.1[1099ID;3;2]
For an intraday chart of active-contract platinum, double-click:
Media://analytics/pages:active-platinum-intraday:/cmd=us@pl.1[1099ID;3;2]
For an intraday chart of active-contract palladium, double-click:
Media://analytics/pages:active-palladium-intraday:/cmd=us@pa.1[1099ID;3;2]
Bridge News, Tel: (212) 372 7562
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