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

To: Alex who wrote (47406)	1/24/2000 6:40:00 AM
From: long-gone	Respond to of 116759

Thursday January 20, 10:03 am Eastern Time U.K.'s fourth gold auction seen less tumultuous By Sharman Esarey LONDON, Jan 20 (Reuters) - The Bank of England will auction 25 tonnes of gold at its fourth successive sale on Tuesday, but the market looks set to shrug off an event that last year crippled some miners and threw gold prices into turmoil. At $288 a troy ounce, gold has come back within a hair's breadth of the $290 level at which it greeted news last May that the U.K. would cut gold reserves to 315 tonnes from 700 and modernise its portfolio. The price at the fourth auction is seen at those same levels, with demand slightly outstripping the offer, amid depressed trading volumes, tight ranges, flat positioning and only modestly elevated options prices. That would put the sale price within those of past auctions -- $261.20, $255.75 and $293.50 -- and would provide the UK Treasury revenue of roughly $230 million. ``As long as there is no real surprise the market will react modestly,' said Macquarie Equities Analyst Kamal Naqvi. ``I think we'll see it around $285 at the auction with a reasonable (oversubscription) then the market may come off a bit to $280.' At 1330 GMT, the market was trading at $287.95/8.55. GOLD MARKET ACTION DEPRESSED The fourth sale finds the market in a slump, with prices sandwiched in a less than $15 a troy ounce range between steady physical demand and producer and central bank selling while livelier oil, metal and softs markets captivate investors with solid trends. ``There is no story here,' said Andy Smith, Mitsui Global Precious Metals analyst. ``Everyone else has a trend.' Average daily gold trading volume is down at levels not seen in over a decade, prices are trading in less than a $15 range, and traders are positioned some 18 tonnes short. In previous sales, traders took big auction bets, positioning themselves up to 200 tonnes long or 250 tonnes short -- positions which provided the fuel for big moves as dealers scrambled out of positions gone sour. Option volatilities, which rise in expectation of sharp price moves in gold, were also subdued. Mid-week, one-month option volatility stood at around 14 to 15 percent, down from the 18 to 19 percent before the last auction, though still above the 12 percent of steady trade. GOLD TRADE SEEN QUIETER THIS YEAR Some predict quiet trade in tight ranges will prevail all year, leaving last year's tumultuous action a distant memory. The first sale in July disappointed and sent prices toward 20-year lows of $251.70 a troy ounce, stoking criticism from miners and mining nations who feared job and foreign exchange losses as central banks pressured gold prices. But a solid September sale, news of European central bank restraint in gold sales and lending and the hedging woes of Ghanaian miner Ashanti Goldfields Co Ltd turned the market around and sent gold sprinting to two-year highs at $338. Last year's final auction in late November was more subdued and was seen as a more likely pattern for this one, although this time prices will be lower. That auction was 2.1 times oversubscribed, far less than the eight times... biz.yahoo.com