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Comex gold, silver end up in ranges, banks on bid

NEW YORK: Gold and silver futures ended higher on the back of dealer buying, but both rangebound metals faced the psychological impediment of central bank disposals.

Comex February gold settled up $1.70 at $284.40 an ounce, moving from $281.90 to $285.30. Spot gold rose to $283.00/3.75 from the late fix in London at $282.25 and Monday's New York close at $281.10/85.

One dealer was cited as a large buyer of gold and silver this week and reportedly bid the market out of it early stasis. But gold bullion's $280-$285 range since last week held, with the market working on little fresh news and anticipating Britain's fourth 25-tonne gold auction on January 25.

Meanwhile, there was scant reaction to afternoon remarks from Swiss National Bank Deputy Chairman Jean-Pierre Roth, who said in an interview to be published in Finanz und Wirtschaft that the SNB's sale of 1,300 tonnes of gold reserves should start as expected this year, once legal changes are in place.

"The market has definitely factored in any central bank sales out of Europe," said Charles Perrignon, an associate director at Macquarie Inc. "So I don't see any further shocks. The next focus is the Bank of England auction toward the end of the month."

March silver moved up 0.50 cent to $5.195 an ounce, trading $5.19 to $5.22. Spot bullion last fetched $5.15/17, versus the fix at $5.155 and the previous close at $5.13/16.

Reports of a large dealer call options purchase had some supportive influence in the silver market. The delta hedge on any such transactions would require the seller to be a net accumlator of bullion to accomodate possible delivery.

But confusion over the People's Bank of China's silver sales plan reported last week continued to hamstring trade and kept a lid on prices.

Pan Jun, a senior PBoC official, said on Tuesday that a report in China's Daily Business Weekly on Sunday quoting him as confirming that the central bank intends to sell some of its surplus silver reserves "twisted the facts."

"At least 90 percent was untrue," he said without elaboration.

"China took something out of the textbook of the Russians," said one bullion dealer, who was reminded of the frequent ups and downs from Russia over platinum group metals exports. "The Chinese today are selling, tomomrrow they are not selling."

NYMEX March palladium ended down $2.55 at $449.40 an ounce, backing off Monday's contract high at $456. April platinum lost 50 cents, settling at $398.

The Chairman of Russian metals giant, Norilsk Nickel said on Tuesday that Russia has been supplying palladium to foreign clients steadily for several months, with shipments only briefly interrupted for the seasonal holiday period.

Yuri Kotylar, chairman of Norilsk, the sole palladium producer in Russia, which accounts for two-thirds of world supply, said deliveries were only interrupted when airlines were unavailable for transport of metals cargoes between December 25 and January 3.

Japanese industry sources said that several importers had concluded import deals with Russia and the first Russian shipments may reach Japan next month.-Reuters