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Asia gold recovers from early Australian selling

HONG KONG: Asian spot gold recoverd from early losses on Monday to trade unchanged from New York's previous close but was seen heading lower.

Gold bullion was quoted at US$283.00/50 per ounce late on Monday, unchanged from New York's previous close on Friday.

After falling by about $4 in New York on Friday, gold slipped further in a thin market, led by rapid selling from Australia, some of it by producers, traders said.

"We had a crazy night in New York on Friday and there may have been some long positions left over in Australia this morning," a trader said.

Gold slipped to a low of US$281.80/282.30 before recovering after buying for physical demand and short-covering by dealers.

However, the price could slip again later on Monday, with support seen at US$280.50, the trader said.

Australian dealers said the producer selling was limited in scope. They said gold was weakened after sharp declines in US stocks on Friday, which were fed by fears of an imminent rate cut by the Federal Reserve.

The interest rate fears contributed to a general liquidation in markets.

"The fundamentals don't look great for gold," a Sydney trader said.

"Physical demand is OK but it is not going to push the market higher. Open interest on comex is at such a low point, it is very hard to see where gold is going one way or the other," he said.

In Tokyo platinum group metals futures ended higher on concerns about Russian supply but settled off earlier highs as investors cashed in profits. Gold futures settled mostly higher in lacklustre trade.

Spot silver was quoted at US$5.25/28 an ounce, unchanged from the closing price in New York on Friday.

Local tael gold was quoted HK$3 up at HK$2,627.

The carry over charge at the Chinese Gold and Silver Exchange Society was -5, unchanged from its previous fix.-Reuters