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

To: Ahda who wrote (13669)	6/22/1998 6:48:00 PM
From: Broken_Clock	Respond to of 116898

New York--Jun 22--COMEX Aug gold futures settled down $3.70 at $297.10 on profit-taking, with a stronger US dollar today undermining market sentiment following gold's big rally on Friday. Gold fell overnight and held on to those losses without much further activity throughout the New York trading day. Jly silver also had a weak tone today, with Jly closing down 2.7 cents at $5.325 after reaching as low as $5.26. Volume in all the precious metals was very light. * * * Traders remain nervous about gold amid the volatile trading in the US dollar against the Japanese yen, with some worried that Friday's $6.20 rally in the August contract was overdone. For the most part, traders said gold's fall today was simply tied to the US currency, which had a firm tone today against the yen, a currency battered by the ongoing Asian financial crisis. Aug gold had hit a 5-month low last week after the dollar jumped to a fresh 8-year high against the yen. The yen has been weakened by the continued Asia economic crisis. A strong US dollar makes dollar-denominated commodities like gold too expensive to buy and encourages selling. An analyst suggested some pressure in gold this morning may have been a matter of the metal playing catch up to silver on Friday, which came off its highs late in the session. Support for Aug gold is seen at $290, followed by $284, with resistance seen at $300, then $306. Some traders said the fact that August settled above Thursday's close of $294.6 may indicate gold could come back and extend its rally from Friday. However, there are still quite a few shorts in the market, said traders, and this could mean further weakness. A trader suggested gold's strong correlation with the US dollar seen over the last several sessions may soon be much less dominant as the US dollar is showing signs of a little less volatility against the yen. In the news, Rudolf Trink, head of treasury for the strategy division of the Austrian National Bank, said today that the ratio of gold taken by the European central bank in its reserves will not provide a benchmark for national central bank (NCB) reserves, and while future NCB sales cannot be excluded they would probably not be related to the share of gold held by the ECB. (Story .10660) Some market observers are also downplaying this month's earlier announcement that the ECB will be looking at holding 10-15% of its reserves in gold. Vanessa Motto, analyst with CPM Group, said the market may have been oversold on the news as the amount of gold that would be made available to the market is not all that significant. "If you look at the countries--Germany, Italy, UK, and France--they are traditional non-sellers. But they hold about 74% of the gold," she said. "The potential ECB gold sales are really not that large, and if they do happen, it would be over a number of years and fundamentally it wouldn't change the market," said Motto. The weak tone in gold also undermined silver and platinum-group metals, with thin conditions discouraging any other moves. Sep palladium closed down $3.55 at $287.00. A trader said there is a large short position in funds, and the market may be a bit overextended on the downside. "It's a matter of just the right moment until you have another short covering rally," the trader said.