Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: long-gone who wrote (69113)	5/14/2001 8:50:32 AM
From: goldworldnet	Read Replies (1) \| Respond to of 116900

No surprises at gold auction Last update: 10:04, May 14, 2001 Britain auctions 20 tonnes of gold on Tuesday but analysts do not expect the sale to inject much momentum into a market where last week's surprise rally has already swept a large number of short positions away. "Prices just rallied up to $270 (a troy ounce) and now they're settled below that. I don't see them changing too much," said Gillian Moncour, consultant at CRU International. "It's not a good time for gold, demand is not particularly huge at the moment," Moncour said. The auction on Tuesday will open the final round of smaller 20-tonne sales under the Bank of England's (BoE) plan to cut gold reserves by more than half to 300 tonnes. The auctions, which began in July 1999, were previously of 25 tonnes each. Further sales in the current series will be held in July, September and November as well as in January and March 2002. Last week, gold prices galloped to two-month highs around $270 after good fund buying. The rally soon ran out of steam but prices were holding firm. Chart analysts said the fact prices had crossed above their 200-day moving average was a sign of potential further gains. By 0815 this morning spot gold was indicated at $268.00/$268.50 versus Friday's New York close of $267.80/$268.30. Traders said although they expected the auction to be oversubscribed, the lack of appetite for gold after last week's aggressive fund buying was likely to turn Tuesday's sale into a modest event. The last sale in March of 25 tonnes of bullion was 2.2 times oversubscribed. By the time of sale, dealers said the market would also be focusing on Tuesday's U.S. Federal Open Market Committee (FOMC) meeting on interest rates and on the slowing US economy. "The Bank of England's gold auctions have been most successful only when there has been a large net short position," one trader said. "At this point there will be very few short positions because of the short covering we've seen over the past week.There is no overriding reason to see why it should be a high degree of subscription and, more important, why the price should be at a premium," he added. An indication for the strike price at the auction is usually the gold morning fix of the day in question. "We expect a reasonable auction result -- around a 50 cents discount to the spot price and a subscription level of around three times," analysts at Australian investment bank Macquarie Equities Ltd said in a report. Further fund buying could trigger fresh rally "It's difficult to predict a strike price accurately but normally it should be close to the morning fix. A lot of orders will be placed in the morning of the auction," a trader said. Both traders and analysts said they did not rule out fresh attempts by bullion to cross the psychological barrier of $270 provided that funds continued to buy after the auction. "A lot depends on how funds will actually interpret the results. They might push a bit higher when they come in to trade in New York on Tuesday afternoon," an analyst said. Technically, traders said the market looked quite strong despite weak fundamentals. "However, I have a feeling that prices might test higher after the auction," a trader said. Reuters businessam.co.uk