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Gold dips at close as equities pick up

LONDON: Europe's gold markets ended a volatile Monday lower, wiping out hefty early gains as investors cautiously dipped their toes back into recovering equities markets.

Traders said panicked investors leaving global stock markets which fell sharply on Friday and early Monday, had parked their money in bullion for just a few hours early in the session, but once Wall Street showed signs of recovering they abandoned ship.

"I knew it wouldn't last -- it never does any more with gold," said one London-based trader. "As soon as Wall Street opened and it was firmer, they all piled back in."

Dealers also said there was some profit-taking around the day's highs of $284.75 a troy ounce.

Spot bullion closed at $281.20/$282.20 from a New York close at $282.50/$283.50.

Traders said the fact that the spot price had not managed to push through the key $285 level was a signal that a downward trend was in place and they cited next support at $280.

Silver prices also fell back in afternoon trade, shadowing gold's every move.

"Silver had a great run-up on Friday which may have been fund buying, but like gold it's right back down again now," said another trader.

Silver ended the session down at $5.11/$5.13 from $5.13/$5.15.

Most dealers agreed that while silver saw extremely little trade, the price seemed pretty solid above $5.10 in the near term.

On the platinum group metals, sentiment in both platinum and palladium was suffering from the lack of arrivals of metal on the market, especially from key producer Russia.

"Anxiety remains over supplies from Russia and this market will remain defensive until solid supplies are forthcoming," said the trader.

Palladium was the only precious metal to end the day in positive territory, closing just higher at $576.00/$591.00 from $575.95/$595.95.

Platinum closed down at $495.50/$503.50 from $500.00/$507.00.-Reuters