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Asian silver lower, PGMs higher in afternoon

HONG KONG: Asian spot silver was lower after overseas selling on Monday and platinum group metals (PGM) rose in reaction to Boris Yeltsin's surprise resignation as Russia's president.

Gold also rose on bargain hunting in thin trading with few markets open on the first business day after the new year.

The major centres of Tokyo, London and New York were closed until Tuesday to allow a smooth changeover to the year 2000.

No problems were reported arising from the millennium computer bug, but market players were cautious and waiting for other centers to begin trading before declaring an "all-clear" for Y2K-related risks, traders said.

Spot silver was quoted at US$5.36/40 per ounce, down from the previous close in New York on Thursday of US$5.40/42.

China imposed measures to curb silver imports, Chinese media said on Monday.

Overseas selling pushed silver lower, but traders said they were unsure whether the import restrictions were a factor as Chinese imports are not believed to be large.

China has said that this year it wants to liberalise the silver market, which has remained closed, as a prelude to opening up the gold market in future years.

"Maybe on the one hand they want to open the market for silver and on the other hand they want to maintain some control," a trader said.

Official figures on China's imports and exports of silver were difficult to obtain, but traders said exports were much greater than imports.

In other news on Monday, the start of wholesale silver trading in China was postponed a month until February.

A spokeswoman in Shanghai for the Huatong Nonferrous Wholesale Market said spot trade would be held on a trial basis pending clarification of the value-added tax rate and qualifications of market participants.

Platinum and palladium were slightly higher after the weekend news of Yeltsin's resignation, a dealer said.

Russia is a major supplier of the metals, but with Japanese markets closed there was little follow-through activity, the dealer said.

Platinum was quoted at US$445.00/450.00 an ounce after opening at US$441.00/445.00.

Palladium was quoted at US$450.00/455.00. The PGMs rallied at the end of 1999 on concerns about Russian supplies and strong demand from industry.

With no complications from the millennium bug, gold could fall from liquidation of long positions on Tuesday, a trader said.

"If gold can't hold above US$290, we may see some selling interest when London and New York open. Some people who went long because of Y2K can be expected to liquidate if nothing happens," he said.

In the short term traders said the range for gold was US$285 to US$291.

Local tael gold was quoted HK$11 down at HK$2,680.

The carry over charge at the Chinese Gold and Silver Exchange Society was -1, up from its previous fix at -5.-Reuters