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Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: paul ross who wrote (3830)	9/20/2001 3:58:53 PM
From: paul ross	Read Replies (1) \| Respond to of 8010

Silver retreats in wake of big purchase NEW YORK, Sept 20 (Reuters) - COMEX silver fell sharply Thursday, retracing most of Wednesday's confusing 6 percent advance, as some traders surmised the spike was linked to the financial troubles of a large Australian mining company. The pullback started in Asia and there was some talk that China may have sold some of its surplus silver supplies into the rally as the buying ran its course. Benchmark December silver fell 21 cents to settle at $4.535 an ounce, moving from $4.71 to $4.465 after a 27.2-cent short-covering rally that inspired a range of explanatory theories on Wednesday. Estimated volume was 21,000 contracts, compared to Wednesday's turnover of 31,694, which was whopping considering COMEX is trading abbreviated sessions this week. Some dealers had reasoned Wednesday that the short-lived rally could have been connected to the lack of immediate access to the 29,942,691 ounces of COMEX silver stocks buried in an official warehouse under the wrecked World Trade Center. Others speculated it was related to the financial troubles of giant Australian zinc and lead producer Pasminco Ltd, which on Wednesday called in administrators to help it dig out from under A$2.9 billion in debt. Silver is a byproduct of lead and zinc mining. Dealers would not say if the two theories were connected. Nevertheless the numbers seem to align closely. Pasminco had a A$269 million silver loan on its books as of July. The current A$ exchange rate of US$0.4950 would translate Pasminco's silver liability at US$133,155,000, which based on Monday's late silver spot price of around $4.45 an ounce, would be the value of 29,922,472 ounces of silver. "It could just be a coincidence. It looked to me as if it were these guys with their black boxes (computerized trading programs)," said a dealer. "They were all short and they covered it back." Another bullion dealer who's firm deals with Pasminco had no comment. But independent commodities analyst Greg Weldon in a client note Thursday, cited dealer talk that Pasminco bought 20 million ounces Wednesday afternoon. "BOTTOM LINE ... Pasminco is likely DONE buying silver, so their impact has already been felt," his commentary read. Spot silver was last at $4.50/53, down from $4.62/65 at the prior close and London's fix Thursday at $4.62. Gold futures came off with less fanfare, in defensive trade as the U.S. armed forces cocked it self for retaliation. The United States has ordered 100 extra warplanes to the Gulf region in response to attacks on New York and Washington which left 6,000 dead and missing, and urged Afghanistan to hand over Osama bin Laden, a prime suspect who has lived as a "guest" of the Taliban, or face the consequences. Dealers said December gold tried to rally at the open, with stock prices continuing to fall as Wall Street started trading. But after funds ran it up a bit, trade houses put a lid on the rally and the contract ended off $2.50 at $289.80 an ounce, trading from $292.30 to $289.00. Turnover was 19,000 lots. Spot gold was at $288.40/90, versus the fix late in London at $288.50 and the close in New York at $290.00/291.50. "I would imagine you'd have to play it from the long side with threats of war still and all that looming in the distance," said Frank Bulfamante of Custom Floor Brokers. "Until that settles down a little bit with an actual declaration or some kind of action, it's still not a good idea to be short here. Wait for the dips. Buy the dips," he said. NYMEX October platinum slipped $1.80 to $490.60 an ounce. Spot platinum fetched $488/498. December palladium fell $14 to $451 and spot went out at $450/460.