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Precious metals fall

in thin trade

NEW YORK: Comex gold settled weaker on Friday, largely taking its cues from the more active silver market in thin, rangebound dealings, traders said.

The active December contract settled $0.70 lower at $389.30 an ounce, traded between $389.80 and $388.80, a range set early. A high of $390.20 was hit on ACCESS overnight. This was the third consecutive week that December finished at $389.30. October went out $0.70 lower today at $386.40.

Volume was very light at an estimated 13,000 lots. Dealers quoted bullion at $383.50/$384.00.

The market showed little reaction to an overnight rally in the dollar or U.S. economic data including consumer prices that were in line with analysts' forecasts and lower-than-expected retail sales figures.

Gold held to a narrow range today, with its movements largely dictated by the volatile silver market.

The Comex September options expiry after the close passed without incident, as the October contract, which acts as the basis for the expiry, settled well below the $390 strike price.

SILVER

NEW YORK: Comex silver settled modestly weaker, drifting inside a narrow range throughout the afternoon after recovering from a midmorning selloff.

The Comex September options expiry after the close appeared to pass without incident, with the $5.25 an ounce strike price ending out-of-the-money.

Bullion dealers attributed the morning's brief slide to a shake-out of long positions taken by players who expected that nearby tightness in the market would spark fresh buying.

The cash price remained at a premium of about 4.0 cents an ounce to September futures, while one-month lease rates were pegged at seven to eight percent.

September silver ended 6.0 cents lower at $5.215 an ounce, traded between $5.295 and $5.12, a one-week low. Volume was modest at an estimate 18,000 lots versus Thursday's 28,586.

The precious metals showed little reaction to dollar gains overnight, although some traders cited a selloff in CBOT soya prices as a negative factor for silver this morning.

Looking ahead, one cash trader said, "The physical tightness in London means prices could come up a bit more."

Another trader pegged nearby support at $5.20 to $5.15.

PLATINUM

NEW YORK: NYMEX platinum settled sharply lower, after tumbling to 4-1/2 month lows on technically driven selling, traders said.

Palladium also suffered heavy losses, hitting fresh life-of-contract lows.

Market sources noted fund liquidation during the declines, while selling thought linked to Japan was also noted overnight and again today.

The selloff was blamed on weakness in silver prices and a firmer dollar, as well as bearish technical signals.

October platinum settled $5.70 lower at $416.00 an ounce, traded between $421.00 and $414.00, the lowest level for a most-active contract since March 27. Volume was estimated at 3,198 lots, termed moderate given the magnitude of the price move, although this was up from Thursday's very light 865.

September palladium also settled sharply lower at $148.10 an ounce, off $3.80 and barely recovered from a low of $147.00, the market's lowest level in over a year on the continuous weekly chart.-Reuter