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Palladium steady , gold market quiet

LONDON: Palladium held steady above $440.00 a troy ounce in late Europe on Thursday after recovering from the day's lows, while gold and silver traded quietly, dealers said.

Palladium was last quoted at $441.00/$446.00, almost $10 down on Wednesday'S close in New York.

Prices fell on Thursday morning after news Russia had offered spot metal to Japanese importers and touched a low bid of $437.00.

Dealers said palladium's fundamental outlook remained positive with demand strong. Some said the palladium weakness could be a market correction after its recent rally to a all-time high fix of $454.00.

"Overall the fundamentals of palladium look pretty good and I think it is just a short-term dip and we will probably see it on an upward path again unless there is any significant selling by the Russians," one London dealer said.

Japanese traders said on Thursday that Russia's Almazjuevlirexport (Almaz) had offered spot palladium for the first time this year.

The price of palladium, used mainly in the vehicle industry in autocatalysts to clean dirty exhaust gasses and in the electronics industry, has soared from $120 an ounce in early 1997 to present levels.

Erratic metal deliveries out of Russia, accounting for more than 70 percent of world palladium supply, was seen as the main reason for the price rise.

Gold traded flat in Europe, locked in its recent range, and dealers said the market was extremely quiet.

"Gold has done nothing and in the last five days fixings have been in a 65 cent range. Absolutely nothing seems to be going on, which is a bit worrying," one dealer said.

Dealers expected little movement ahead of Friday's expiry in COMEX gold options and the Martin Luther King holiday in the United States, which will see financial markets closing early on Friday and only re-opening on Tuesday.

"With the market being somehow short, further short covering ahead of a long weekend could help the price higher," one Swiss dealer said, adding that the option expiry could provide good two-way flows.

Spot gold was last quoted at $282.50/$283.30, up from the New York close at $282.30/$282.80.

Silver was one cent higher at $5.10/$5.13 and dealers said fears of Chinese sales were still hanging over the market.

It dropped around 5 cents late on Wednesday on long liquidation in New York but traded steady in late Europe.

Platinum was firm and last quoted higher at $421.00/$425.00, from the New York close at $420.40/$425.50.-Reuters