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

To: PaulM who wrote (12491)	6/2/1998 7:49:00 AM
From: Bobby Yellin	Respond to of 116922

oil-gasoline.com oh well..looks like no inflation there hearing about more and more strikes though..not necessarily asking for wage increases.. still looks like currency devaluations and fear of deflation might be trigger for gold

To: PaulM who wrote (12491)	6/2/1998 3:34:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116922

Gold price rally resumes on short covering 11:28 a.m. Jun 02, 1998 Eastern LONDON, June 2 (Reuters) - Gold rallied again during the European afternoon on Tuesday, nearing the top of a $5.00 intra-day range above $287.00 an ounce on producer buybacks and short covering by investors, dealers and analysts said. Gold fixed at $291.45, up on the morning's $289.20, having seen its early European rally steady then resume once U.S. dealers arrived for work. One London analyst saw gold's performance as encouraging given the amount of bearish news that had hit sentiment in recent days. ''A number of people thought it would get down towards $285 before it steadied. Maybe because it failed to get that low having been under quite a lot of pressure means that the short covering came in,'' he said. ''The rally has built a little bit of confidence in that it's not completely one-way traffic, but I think it's just a short-covering rally. What's more important is what happens next,'' he added. Gold has faced bearish sentiment recently amid reminders of planned Swiss gold sales and the possibility of accelerating Russian sales due to the country's financial crisis and its new export regime. Also, Southeast Asian demand has been dampened by regional currency weakness and India and Pakistan's nuclear stand-off. Widespread talk of producers having bought back forward sales positions, cashing in price hedging programmes, was seen by the analyst as a possible cap to any decent rally. ''I don't know whether it's bearish in terms of where the price is at the moment, though obviously it cuts off any major chance of a rally given that the gold may come back into the market again in the next few days,'' he said. Wolfgang Wrzesniok, metals analyst at Dresdner Kleinwort Benson in Frankfurt, said gold had more to do to break its slide lower. ''The situation is still uncertain and even if gold has now gained $4.00 since the lows, it's still vulnerable...$286 is quite a strong support and I think it was right that we held there this morning and recovered,'' he said. ''But if we don't go back over $295, and pretty soon above $300, this is just a short-covering rally,'' he said. Gold's fall early last week from a narrow range pegged to $300 surprised several dealers who had seen the price as likely to idle ahead of a series of meetings related to monetary and reserves policy at the new European Central Bank (ECB). Tuesday saw the ECB board meet for the first time, kicking off its operations in Frankfurt with a discussion ahead of the first full council meeting, expected on June 9. The main task facing the central bank between now and January is to make final decisions on policy. Gold and its role in reserve policy has tended to be well down the ECB priorities list to date. Spot gold was last at $291.20/$291.70 versus its New York close of $288.20/$288.70. Wrzesniok said silver's rally from support at $5.00 had also buoyed gold on Tuesday and signified an end to the current move downwards in silver. ''We have had a game between a couple of U.S. funds taking advantage of the big physical flow of metal into London,which caused lease rates to drop and made short positions financially viable again,'' he said. ''The funds used the opportunity to bring it lower and they squeezed out a lot of the weaker longs on the way down. We have now found the bottom,'' he said. Spot silver was last at $5.19/$5.22, up 10 cents up on its New York close. Platinum was last at $365.00/$367.00 versus $363.30/$365.30, while palladium was at $257.00/$267.00, down $3.00. ((Patrick Chalmers, London Newsroom +44 171 542 8057. london.commodities.desk+reuters.com))