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Gold cuts losses in,platinum steadier

LONDON: Gold bullion prices nipped up from earlier lows during Wednesday afternoon European trading, cutting losses from yesterday, while the high-flying platinum metals continued to consolidate, traders said.

Gold was fixed at $285.90 an ounce in the afternoon, one dollar above the morning fixing, building on earlier physical buying that kicked in around $285.00.

Short covering and fund buying in the United States also helped gold stage a partial recovery, after slipping from around $290.00 in the wake of Britain's fourth gold auction on Tuesday. T Hoare Canacord analyst Rhona O'Connell.

In the very short term gold was expected to remain close to $285, given underlying physical buying, prior to a slide towards a technical objective of $282.00, traders said.

O'Connell said expectations of further sales from the Dutch central bank might keep the gold price subdued in the short term.

The bank said on Tuesday that it had sold 23 tonnes of gold last week, leaving it with 36 tonnes to sell until November under its plan to sell 100 tonnes in 12 months and a further 200 tonnes over the next four years.

The National Bank of Belgium said on Wednesday it was still lending gold but added that it has respected the September 1999 agreement signed by 15 European Central Banks not to increase its activity.

"We are still lending gold although only with the best guarantees regarding the security of our operations," Governor Guy Quaden told Reuters in an interview.

The National Bank of Belgium was one of the first central banks to reduce gold stocks, selling more than 1,000 tonnes between 1989 and 1998 in an effort to help pay down the country's debt. It began lending gold in 1994.

The central bank now has around 300 tonnes, part of which is pooled with the European Central Bank in Frankfurt.

Spot gold was last quoted at $285.00/$285.80 from the New York close at $285.75/$286.50.

Palladium and platinum settled back after hitting new cycle highs on Tuesday -- the former metal had notched up a new record fix of $476.00.

Traders said profit-taking and a technical correction had been expected.

But palladium still had scope on the upside, with dealers and analysts predicting a test of the $500.00 level in the near future.

The main driving force behind record palladium prices was the lack of Russian metal on the market, which has seen prices increase by around 300 percent since January 1997.

Platinum was last quoted at $450.00/$454.00, off the New York close at $459.90/$464.90, and palladium at $469.00/$474.00, down from $477.00/$482.00.

Silver eased to $5.19/$5.22 from the close at $5.25/$5.28, matching gold's trend.-Reuters