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

To: goldsnow who wrote (6866)	1/27/1998 7:56:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116762

Gold hovers around key $300 level, awaits options 07:45 a.m. Jan 27, 1998 Eastern LONDON, Jan 27 (Reuters) - Gold gyrated on either side of the key $300 an ounce level on Tuesday in nervous trading ahead of the Wednesday's over-the-counter options expiry. Early on, prices had taken heart from strength in silver and rebounded after an overnight slide. The yellow metal fixed at $300.00 an ounce on Tuesday morning, down from the $302.75 fixing from Monday afternoon but well off overnight lows of around $296. ''It looked like gold advanced on the back of silver. When (gold) fell, silver didn't budge and this morning there was fresh buying in silver which lifted gold,'' a dealer said. But prices subsequently slipped back and spot gold was last indicated at $298.90/$299.40. ''All eyes are on the options expiry so it's going to be on either side of $300,'' a trader said, noting that would be a key ''strike'' price for gold options. ''It's going to be a nothing day for gold but we could see some more action on silver,'' he added. The market was taking a breather after a violent rally late on Friday and early Monday sent prices racing up around $15. Dealers had attributed the rally to buying from investment funds sparked by a weaker dollar and political uncertainty surrouding U.S. President Bill Clinton. But a rebound in the U.S. currency late on Monday, coupled with a spate of producer selling, erased some gains. The market was also puzzling over barely changed open interest on New York's Comex futures market last Friday, which was shown at 179,642 lots, off just 977 lots. A sharp drop in the open interest had been expected by many observers, who thought prices had soared as funds covered ''short'' positions taken earlier in anticipation of a price drop. Analysts said the lack of movement in the open interest might suggest that fresh buying had balanced out short covering. But the market shrugged off news that Eurostat, the European Union's statistics agency, had rejected an Italian plan to use taxes raised from a gold sale to cut its 1997 deficit. Analysts said that in more bearish times the rejection might have raised concerns -- justified or not -- that Italy could consider outright sales of gold reserves to raise the money. ''The market has got more to think about at the moment. The Clinton saga has knocked everything else off the front page,'' said analyst Andy Smith of Union Bank of Switzerland. In other precious metals, silver was up sharply at $6.06/$6.10, compared to $5.94/$5.96 at Monday's London close. Dealers said the market was still tight, with demand for the metal showing up in a fresh decline of Comex inventories. ''It is likely that much of this metal is indirectly going to India to meet the seemingly insatiable appetite for precious metals in the country at the moment,'' brokers GNI said. ''Psychologically $6.00 seems to be very important, and it would seem that if the market can remain above this level, then it will have sufficient strength for a further test of resistance at $6.39,'' it added. Platinum eased 50 cents to $383.50/$385.50, and palladium was off $1.50 at $232.00/$234.00. ((Lida Poletz, London newsroom +44 171 542 2936, fax +44 171 542 8077, london.commodities.desk+reuters.com)) ^REUTERS@