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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Cynic 2005 who wrote (40745)	9/24/1999 9:09:00 AM
From: Rarebird	Read Replies (1) \| Respond to of 116764

NY Precious Metals Review: Dec gold up $1.8,nears 3-month high By Melanie Lovatt, Bridge News New York--Sep 23--COMEX Dec gold futures settled up $1.80 at $267.30 per ounce recouping their earlier loss and jumping to $267.80 late in the session--close to a 3-month high. Gold sentiment continues to improve amid positive fallout from the UK auction Tuesday. Traders said some funds were covering short and noted that others were even going long. * * * Leonard Kaplan, chief bullion dealer at LFG Bullion Services, said that the auction had spurred "a change in psychology" in the gold market. He said that increasing open interest suggests that new longs are coming into the market. Traders said that much of the buying action today was probably fund driven, although David Meger, senior metals analyst at Alaron Trading, noted that funds were probably doing a combination of taking on new long positions and covering shorts. "The locals were also friendly to the market," he noted. Traders said that the continued strength in the yen against the dollar remained positive for gold, while the climb today in the Bridge Commodity Research Bureau index was also supportive. Meger noted that gold had initially slipped lower overnight on producer selling out of Australia. "This is not surprising given that a higher gold price and Australian dollar makes hedging prices very attractive for Australian producers," he said. "This snowballed and we initially saw some fund selling," he said. However, he noted that the spot price's resilience, as it held above $261.80 per ounce, set the stage for further gains. He said that $270 is "not far away" if "Asia stays strong and we get a good forex situation." The completion of the auction effectively lifts a weight off gold and frees it to finally enjoy the yen's climb against the dollar, traders noted. "We need to watch the Asian economy and the Nikkei and gold were tracking each other well until the last UK sale," he said, referring to the UK's first gold auction on Jul 6 that pushed prices to a fresh 20-year low. "Now gold has to catch-up" with the Nikkei, he said. Meger noted that players would keep a careful eye on open interest and Friday's Commodity Futures Trading Commission commitment of traders report. However, he admitted that this report, which covers the two weeks up to a including Tuesday Sep 21, will only give information for a small portion of this week's rally. Nevertheless, the commitment report shows many of the shorts covered positions during Tuesday's auction-driven price rally, it could still prove bullish, he said. Meanwhile, Kaplan points out that higher lease rates in gold continue to drive the market higher. Lease rates for 1-month are still over 3%, which is way above typical gold levels of just under 1%. However, he notes that the key to the market is whether producers who have not until now been heavy sellers will decide to come into the market. Some market observer s are suggesting that producers will instead wait it out in the hope that gold prices will continue to climb higher. "Where they come in could well mark the end of the rally," said one trader. Gold's recovery and subsequent jump to higher prices today failed to provide much lift to the rest of the precious metals complex and they all ended in negative territory on profit-taking. Profit-taking was particularly heavy in platinum, with Oct skidding to a 10-day low of $369.40 per ounce.