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Gold/Mining/Energy : A to Z Junior Mining Research Site -- Ignore unavailable to you. Want to Upgrade?

To: 4figureau who wrote (3242)	2/12/2003 9:44:35 AM
From: 4figureau	Read Replies (1) \| Respond to of 5423

UBS Warburg: Gold is in the grip of a long-liquidation frenzy, temporarily ignoring currency and risk aversion factors. While we remain positively disposed towards gold over the medium term we will remain cautious in the short term until we have seen the full extent of selling from Tocom based speculators. Gold: Trading: In New York, gold came under pressure from Comex-trading speculative long liquidation and filled a gap at $361.40 in April futures. Once this had been completed, however, gold made a steady recovery on short-coming and a mixture of investor and speculator buying. One US bank was a noted buyer on the floor on a number of occasions and gold was also helped by strong crude, a firm euro and weak-ending US equities and the metal ended the day just above $362/oz. In Asia, however, gold opened higher and initially moved up before Tocom liquidation took over, driving the metal down to the $360 level, which held. With all Tocom contracts locked at limit down there was no further selling pressure beneath this level but gold could not rally from here until the close of the exchange. Once Tocom closed gold rallied a couple of dollars on dealer short-covering and has traded up to around the $363 level in early European hours. Options: Implied gold option volatility fell by between 0.5 vol in the one month and 0.05 vol is the 5 year compared to yesterday morning. Further declines are likely should the spot price begin to establish a fresh trading range between $360 / 368. View: Tocom open interest fell by only 8 tonnes last night. Since Tocom general public speculators recently held 4 million ounces of net long positions and, importantly the active contracts ended limit down last night, there could be more Tocom liquidation to come. Tonight should see uninterrupted trading on the exchange unless gold falls by more than $10/oz; the Y40/g limit represents a 3% move in gold. Silver: Trading: Silver opened under pressure on Comex (whats new) with commission houses steady sellers but once this had been absorbed and gold rallied, silver headed higher in what was a comparatively quiet day. View: Silver has failed to hold its risk aversion gains and while the metal will continue to takes its direction from gold, further underperformance looks likely. Silver should further benefit from the weaker US dollar (as will all dollar-denominated commodities), but since silver’s applications are largely industrial in nature the metal will continue to be hit by slowing economic activity. thebulliondesk.com