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

To: Mark Bartlett who wrote (44018)	10/27/1999 8:42:00 AM
From: Alex	Respond to of 116815

Gold watchful ahead of OTC options expiry LONDON, Oct 27 - Gold settled near $290 support during early European business on Wednesday, one of several price levels mentioned by dealers as possible targets for the day's expiry in monthly over-the-counter options. London gold fixed at $290.40 a troy ounce in the morning versus Tuesday afternoon's $296.40, its lowest since September 28, the day of its $45 rally to near $330. "It's tough to say where we are going. the moves of the last couple of days have left us right on major support," one London dealer said. Spot gold was last at $290.00/$291.00 versus Tuesday's New York close of $288.40/$290.40, above Asian lows below $286. Gold dropped through $300 with little effort last Monday, sliding on stop-loss selling through $295 and $290 before bouncing from $285 support during Wednesday's Asia trade. October's exceptional price volatility -- spurred by European central banks' late September pledge to cap gold sales, lending and derivatives activities -- leant the regular OTC expiry special significance this month. "Everyone's a bit perplexed. There's big open interest at $290 and $295 so we'll probably just drift around those levels until expiry," the dealer added. Gold moved from $270 on September 27 to peak near $340 just a few days later amid short-covering helped by surging lease rates and options volatilities. Prices, lease rates and options volatilities all eased as the month progressed, taking the pressure of miners like Ghana's Ashanti Goldfields Co Ltd , which faced margin calls and a takeover attempt when its hedge book liabilities became clear. PRESSURE ON CALL OPTION WRITERS Miners and bullion dealers who wrote call options prior to the central bank news faced mounting derivatives losses as gold rallied, forcing some to close out positions and take the hit. Call options give holders the right but not the obligation to buy at an agreed date and price in the future, a right for which they pay a options writers a premium based on time to expiry, price and market conditions. Monthly OTC expiry sometimes generate heavy two-way business and rapid price swings before and after the event as options writers juggle their books to limit exposure. "We might have another look at the lows today, probably after the expiry," one London dealer said. Spot silver was last unchanged versus New York's close of $5.17/$5.20 as was palladium at $390.00/$395. Platinum was up $1.40 at $411.00/$416.00. For related news and prices, click on the codes in brackets: Spot gold/silver Platinum/palladium Gold lease rates Comex gold futures Europe/Asia prices RELATED NEWS AND OTHER TOPICS Precious metals news All metals news Metals summary Index of summaries All commodities news Metals diary Ldn Bullion Mkt Assoc Foreign exchange rates SPEED GUIDES uk.news.yahoo.com