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Comex gold ends up in quiet trade, awaits UK sale

NEW YORK: Comex gold ended higher in quiet trade Monday, awaiting next week's fifth UK gold auction, while platinum and palladium were mixed, dealers said.

Comex April gold ended up $1.50 at $291.40 an ounce after moving narrowly between $290.00 and $292.90. Spot bullion was last quoted at $290.00/0.75 versus the late fix at $290.65 and the previous close at $288.50/9.50.

On March 21 Britain will hold its fifth 25-tonne gold sale since last July, ending the first part of its programme to reduce reserves to 300 tonnes from 715 tonnes.

The UK Treasury on March 3 announced the next series of sales, which will see 150 tonnes of British gold sold in six 25-tonne auctions starting in May 2000.

"People are still waiting for the UK. The market is pitching itself at a level were 25 tonnes can be easily popped into the market," said Ian MacDonald, bullion trade manager at Commerzbank. "We're still very much in consolidation mode."

Dealers said physical demand for bullion has been vibrant, particularly from India where gold is exchanged at a solid premium over London bullion prices.

But while bullion buying by hoarders and jewelry fabricators has checked recent spot moves below $290 an ounce, there has been little willingness to chase prices higher in the run-up to the UK sale.

"Gold does seem to be attractive at $290 and below and silver at $5.10 an below in the spot market," noted William O'Neill, head of futures research at Merrill Lynch. "We're not talking about big nubmers but there's fairly consistent interest in the last three weeks or so."

May silver ended unchanged at $5.107 an ounce after trading $5.105 to $5.16. Spot bullion last fetched $5.06/09, was fixed at $5.0925 and closed Friday at $5.05/08.

Nymex June palladium fell $15 to $685 an ounce but April platinum rose $6.30 to $476.50 an ounce.

The market is still awaiting signs that delayed shipments from top palladium producer Russia have arrived on world markets.

Nymex palladium futures were propelled to a record high $835 an ounce last month by speculators and auto makers panicky over supply shortages.

Soaring prices led the Tokyo Commodity Exchange, the world's biggest platinum metals futures market, to impose a price freeze until March 15 to calm the overheated market.

"A very key date is coming up March 15. There is some real concern if TOCOM board decides to lift the restictions they imposed back on Feb 23 that we could see spike in the market," said O'Neill.

"I think that will make the market very nervous, given the fact that we still don't see any Russian material," he said. -Reuters