20000314

Asian gold higher in afternoon on lower dollar/yen

HONG KONG: Asian spot gold rose on Monday after currency-related buying from Japan but appeared unable to break out of the recent trading range.

Gold bullion was quoted at US$289.80/290.30 per ounce late on Monday compared to New York's previous close at US$288.50/289.50 on Friday.

The market drifted back below US$290 on Friday in New York and has been holding in the current range for more than a week.

"There was light local and Japanese buying, the latter coming on a lower dollar/yen rate," a Hong Kong trader said. "But I can't see any reason for gold to go outside of this range for the time being."

He said the price was expected to remain between US$288 and US$292 for the short term.

The yen was higher after government data showed surprisingly strong capital spending, which was taken as a sign of recovery. The currency rose to six-week highs of 105.80 yen to the dollar compared to 106.23 yen in New York on Friday.

In Tokyo gold and silver futures ended lower on the yen's strength against the dollar.

A commodities brokerage analyst said trading in precious metals futures on TOCOM has been in the doldrums since the exchange froze palladium futures in late February to tame overheated trade.

Spot silver was quoted at US$5.08/11 an ounce after closing in New York at US$5.05/08 on Friday.

There was light buying of silver in Hong Kong, a trader said, but a letter to shareholders of Berkshire Hathaway from US billionaire investor Warren Buffett over the weekend shed no light on Buffett's silver trading strategy, the trader said.

Local tael gold was quoted HK$20 down at HK$2,686.

The carry over charge at the Chinese Gold and Silver Exchange Society was 8, down from its previous fix at -4. -Reuters