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Gold flat, palladium extends fall

LONDON: European gold was mired in a thin trading range on Friday, while palladium extended its fall in selling ahead of the weekend's Russian presidential elections, traders said.

Dealers reported selling of palladium on expectations that acting President Vladimir Putin -- widely tipped to win Sunday's vote -- would sign the necessary documents allowing exports from the central bank and state precious metals and gems reserve Gokhran.

"People are selling now before the price goes further south after the election," said one London-based trader.

Palladium lost 3.9 percent during the European session to end at $610/$640, down from a close of $635/$665.

But some analysts said the elections would probably not have any influence on speeding up the administration involved in freeing exports.

"I don't think the elections are necessarily a factor -- deliveries will take place as and when the bureaucracy is sorted out -- that could be tomorrow, next week, next year," one said.

Traders said volumes in Europe were good. While there were no identifiable fundamentals driving the sell-off, some of the activity might involve metal of Russian origin filtering through to the market.

The market was waiting signs that long-delayed Russian shipments had arrived in the West, where record motor industry demand helped propel palladium prices to all-time highs over $800 last month.

Traders saw potential for a break on the downside, with $600 seen as key support, but expected any fall to be contained.

Gold saw little activity during the session after a hefty fall late on Thursday on the back of fund selling, traders said.

"The market has been extremely quiet as people are waiting in anticipation of heavy physical selling," one trader said.

"We'll see prices stay in the $283.50-$287.00 range, underpinned by physical selling, but sentiment is pretty weak."

Dealers reported talk that the Swiss National Bank might be ready to embark on the first chunk of some of the 1,300 tonnes it plans to sell, which would bloat market supply.

"That's pulling the market down, but there's really not much going on at all," said another dealer.

Spot gold closed little changed at $284.20/$285.40, from $284.70/$285.50.

Silver saw very little trade during the European session, drifting to close almost unchanged at $5.08/$5.10, from New York's close of $5.07/$5.09.

Platinum was last indicated lower at $474.40/$482.40, from $478.60/$483.60.-Reuters