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

To: Enigma who wrote (15300)	8/4/1998 4:33:00 PM
From: Broken_Clock	Respond to of 116764

Updated Tue Aug 4 16:10 ET Full:NY Precious Metals Review: Dec gold up $4.6; shorts cover By Melanie Lovatt, Bridge News New York--Aug 4--COMEX Dec gold futures made a dramatic turnaround today, managing to claw back early losses to settle up $4.60 at $292.50 per ounce. After initially extending Monday's price slide to hit a contract low of $286.80 in the overnight Access session, Dec gold was helped higher by a firmer yen and then a dip in US stocks. This prompted a flurry of panicked short-covering, pushing Dec to 4-day high of $293.50 late in today's session. * * * Traders said that one large NY trade house, who had been on the buy-side early Monday, was once again the main player behind the initial move higher. As gold climbed, shorts started to feel vulnerable and rushed in to cover, said one trader, noting that Monday's heavy jump in open interest was indicative that more shorts positions were added during the downturn. COMEX reported that open interest on Dec climbed by 14,334 contracts Monday to 96,868. Bernard Savaiko, analyst at PaineWebber, said that the dip in US stocks prompted a "flight to quality" with gold being a beneficiary. Today the Dow Jones Industrial Average fell to its lowest intraday level since Mar 6 and was down 71.14 at 8514.60 at 1550 ET. Stock analysts are divided as to whether today's stocks fall represents a correction or will be the start of a downward trend. "Equities have been volatile in the last few weeks...That's why people are taking a look at gold again," said Ted Kempf, analyst at CPM Group. "With gold again almost retesting the lows it saw in January, it becomes more difficult to justify going short," he noted. He said that if gold does not test $284 near term, players will probably try for $290 resistance and it will then trade in a $290-300 range. Analysts generally expect that gold will not become popular among investors unless alternative assets such as stocks, bonds and currencies undergo corrections and become less attractive. "Gold is vulnerable to sharp moves and if it doesn't get above $290, the same traders are likely to short it again," Kempf said. Traders said that while today's rally was sparked by an overnight uptick in the yen, the yen's recovery was at best anemic, with it trading sideways in the US session. "The yen is up, although it's not made that much headway and we've had some physical buying, but it's all to do with short-covering," said one trader, noting that this week's price drop took gold into oversold territory. Another noted that Dec gold's move above $290 was "helping" to encourage chart-based buying. Some remain unconvinced that the rally will last. "If there's a lack of fresh selling there will be some kind of rally, but it'll be short-lived," said one trader, noting that the overall tone in gold remains negative. Traders said that for the rally to be sustained, the yen would need to continue to edge up from its lows against the dollar. "It could be a good short-covering rally if the Japanese get their house in order...If not and the yen falls, it will push gold lower again, because there's no other real reason to buy gold," said one trader. Meanwhile, traders said that Monday's spot gold price drop to a 6 1/2 month low of $283.60 per ounce gold had pushed up retail demand. "Banks have reported doing decent business in small bars and coins," said one trader, but he cautioned that this type of business is not sufficient by itself to hold up prices. Silver and platinum ended the day higher in step with gold, while Sep palladium broke the ranks to end down $7.20 at $294 per ounce. Palladium dropped after Japanese buyers told Bridge that Russian export agency Almaz is expected to reach an agreement soon and sign 1998 export contracts for platinum and palladium, resuming shipments to Japan in early September. SETTLEMENT PRICES --Dec gold (GCZ8) at $292.5, up $4.6; RANGE: 293.5-286.8 --Sep silver (SIU8) at $5.453, up 9.3c; RANGE: 5.48-5.35 --Oct platinum (PLV8) at $337.0, up $5.8; RANGE: 378.8-370.2 --Sep palladium (PAU8) at $294.0, dn $7.2; RANGE: 294.0-288.0 SPOT PRECIOUS METALS PRICES: Late New York London Late Tokyo Gold (KRCGL) 288.10-288.60 285.30-285.80 284.90-285.60 Silver (KRCSL) 5.44-5.47 5.38-5.41 5.37-5.40 Platinum (KRCPL) 374.00-376.00 374.00-376.00 371.00-373.00 Palladium (KRCPA) 288.00-298.00 291.00-301.00 299.00-309.00 End