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Gold choppy , platinum weaker

LONDON: Gold moved around $310.00 in late Europe trade on Thursday as the market digested news of producers reducing hedge positions, dealers said.

"It has been a choppy day but there has been some good two-way business around. Most people are not willing to take out large positions with still further news to come out," one said.

The market was wading through a wealth of reports from producers, including the world's biggest gold miner AngloGold Ltd , signalling a trimming of hedge positions.

Most gold producers have been active hedgers, protecting themselves against possible falls in prices by selling future production forward at a fixed price. But if the price of gold rises, this can backfire -- as African miner Ashanti experienced last year.

The market was keeping a watchful eye on Ashanti Goldfields Co which is struggling to secure its future following huge losses on its gold hedging book.

Ashanti said it would be holding talks with a number of its stakeholders and financiers over the coming days after its defeat in a Ghana court battle with dissident shareholders.

Dealers said they suspected Ashanti would close out the remainder of its hedge book at some point.

AngloGold Ltd said it would continue delivering into its hedge position this year, signalling lower levels of forward sales.

Another South African producer, Western Areas Ltd WARJ.J, said it had closed out its forward sales for the next two years at a cost of 19 million rand ($2.99 million).

Its net hedge position at the end of last year was 418,042 kg, around 10 tonnes down from the end of the previous quarter.

Spot gold closed at $312.00/$314.00 a troy ounce, up from the New York close at $305.00/$306.00.

Platinum and palladium fell sharply on profit-taking and reports of Russian deliveries of palladium.

Spot palladium closed at $570.00/$580.00, off the New York close on Wednesday at $590.00/$600.

Platinum was down at $538.90/$548.90, from the $565.00/$575.00 close.

Palladium slipped after Russia was reported to have offered spot metal to Japan, but traders said large net short positions held by individual investors on the Tokyo Commodity Exchange (TOCOM) meant the bull run should continue.

Almazjuvelirexport (Almaz), Russia's sole exporter of palladium and other platinum group metals (PGMs), offered spot palladium to Japanese importers for the first time since January 21, traders said.

Palladium deliveries from Russia have been halted during the first half of each year since 1997 due to bureaucratic delays in Moscow. That has pushed the price up from $120.00 an ounce in early 1997.

Silver closed just higher at $5.35/$5.38 from the $5.34/$5.37 New York close.-Reuters