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Gold remains lower

NEW YORK: COMEX gold remained lower at midday, pressured by a retracement in the silver market as it corrected the sharp gains of recent sessions, traders said.

They noted that gold was quiet and largely neglected as traders focused on silver, where signs of nearby tightness have fueled recent rallies and continue to make the market nervous.

At 1222 EDT, December gold was off $1.00 at $388.70 an ounce, traded narrowly between $389.40 and $388.40. A high of $389.60 was hit on ACCESS overnight.

Dealers quoted bullion at $383.50/$384.00.

The Federal Open Market Committee, the Federal Reserve's policy-making arm, continued its meeting today, although no change in interest rates is expected. In the past, any change in rates has typically been announced around 1415 EDT.

NEW YORK: COMEX silver fell further at midday, in a continued correction of the strong rallies of the past three sessions, traders said.

At 1215 EDT, September silver was off 11.2 cents at $5.68 an ounce, traded between $5.755 and $5.645. A high of $5.81 was hit on ACCESS. December was off 10.5 cents at $5.75.

Floor sources noted trade and commission house selling today, although only light fund activity was seen.

He expected September to pull back to $5.52/$5.48 before tightness in the contract sparked a renewal of the recent rally, perhaps late this week or early next week.

September's open interest Monday fell 2,838 lots to 37,898, representing just under 190 million ounces versus COMEX warehouse stocks of under 150 million ounces.

Monday's open interest fell for the second consecutive session, for a two-day decline of 1,670 lots, suggesting short covering during the latest rallies.-Reuter