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Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: Ray Hughes who wrote (1704)	2/16/1999 7:54:00 PM
From: TD	Respond to of 8010

[ NY silver ends sharply lower, gold, PGMs also off NEW YORK, Feb 16 (Reuters) - New York silver prices sustained heavy losses Tuesday amid heavy fund selling as the apparent tightness that has been exciting the silver market over the last three weeks showed evidence of subsiding. A week-and-a-half ago, silver prices rallied to a six-month high as nearby silver appeared to tighten amid skyrocketing lease rates and tightening COMEX spreads, leading some to suspect a squeeze in the market. Those lease rates and spreads eased sharply Tuesday, sparking a sell-off. COMEX March silver ended at $5.445 an ounce, down 21.7 cents from Friday's finish, after trading $5.31 to $5.735. Spot silver was quoted at $5.47/49 compared with the London fix at $5.665 and Friday's New York close at $5.68/71. Stop-loss orders were triggered at $5.45 as funds began liquidating their positions en masse. "Lease rates were all over the place," said William O'Neill, director of futures research for Merrill Lynch. "They've been quoted as high as 14 percent and as low a 6 percent. But it's safe to say they were directionally lower. "The point is that there was never any fundamental reason for silver to have rallied the it did (a week-and-a-half ago)," he added. "Options expirations on Friday came and went with barely a peep. And it rarely goes by without some volatility. I think we were due for a sell-off like this." Talk of a squeeze had been mounting since the first week of February, the one year anniversary of Warren Buffett's declaration of his 129.7 million ounce long position. His name is persistently invoked as a cause for any sharp movements in the market, although the company said it will remain mum until it issues its annual report next month. One theory has held that a holder of call options had exercised causing a short-term tightness. Asked if the squeeze is over, one trader said, "It's difficult to say. You don't want to rule out anything. But there does seem to be a credibility gap if the price can't seem to hold above $5.80 an ounce." In London, the London Bullion Market Association said that silver's recent rally had taken place amid orderly market conditions, which do not warrant official intervention. "We decided that nothing needed to be done at this time. If the market were to become disorderly or the backwardation were to go to silly levels then we would look at it again," said LBMA chairman Peter Fava. In Friday's CFTC commitment of traders report, the net speculative long position totaled 68,051 lots as of February 9against 46,220 lots two weeks prior. COMEX April gold ended at $287.40 an ounce, down $3.80 from Friday, after trading between $285.00 and $291.00. Spot bullion was quoted at $285.30/80 compared with the afternoon London fix at $285.30 and Friday's New York close at $289.30/80. "The whole metals complex from copper to gold to silver was hurt by the weakness in the yen," O'Neill said. "The CRB index was at its lowest level in nearly 24 years. None of this helped precious metals." Bridge-CRB said that the index, which hit a low of 184.25 points, is at its lowest level since July 2, 1975. Japanese officials said over the weekend that it could tolerate a weaker yen and would try to lower long-term interest rates, which provided the impetus for the dollar to rise to its highest level in over two months. Key stop loss-orders were triggered by funds at $288.00. NYMEX April platinum settled at $367.20 an ounce, down $3.40, while March palladium closed at $350.00 an ounce, down $7.50. The sell-off in platinum group metals was attributed to profit-taking overnight in Japan. but the market is still concerned about palladium supplies, particularly in the light of announced nickel production cuts. PGMs are produced as a by-product of nickel production. ((Derek J. Caney, New York Commodity Desk, 212-859-1646, derek.caney@reuters.com))