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Gold littel firmer

NEW YORK: COMEX silver pared gains at midday, as trade selling pressured the market after an early rally linked to fund buying, including short covering, traders said.

At 1255 EDT, September silver was up 5.5 cents at $5.635 an ounce, near the bottom of the day's range from $5.76, the highest level for a most-active contract since May 9, and $5.625.

One floor source said the market appeared overdue for a correction after this week's strong gains, amid signs of nearby supply tightness. He pegged a near-term downside target of $5.48 to $5.42.

Traders remained wary of the tightness, which many speculated was at least partly the result of an attempt to squeeze the market.

NEW YORK: COMEX gold was barely firmer at midday, relinquishing most of the modest gains from an early rally in sympathy with silver.

Traders noted producer selling interest at $385 an ounce in the cash market helping to keep a lid on the market today.

They added that news of a 2.9 million ounce hedging program by South Africa's Beatrix Mines Ltd also weighed on sentiment.

At 1240 EDT, December gold was up $0.30 at $389.30 an ounce, traded between $390.80 and $389.10.

Dealers quoted bullion at $383.90/$384.40.

Gold has consistently lagged silver as it rallied through most of the week amid signs of nearby supply tightness._Reuter