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Gold settles little changed

NEW YORK: COMEX gold settled barely firmer, receiving a slight lift near the close on short covering in thin, dull dealings, traders said. The market continued to move sluggishly in silver's shadow, with good physical buying interest seen lending support to cash gold prices at $383 to $381.50 an ounce.

December gold settled $0.30 higher at $388.40 an ounce, near the top of the day's $388.50 to $387.10 range. A high of $388.60 was hit on ACCESS overnight. Volume was light at an estimated 16,000 lots, versus Tuesday's official 19,162.

Dealers quoted bullion at $383.30/$383.80. One dealer added that a rally today in the XAU index of North American gold mining shares was supportive for gold, although much of the index's nearly three-point gain came after the COMEX close.

Traders said the market will be watching for a possible cut in the German discount rate Thursday, although moves in the volatile silver market, amid continued worries about nearby supply tightness, were expected to remain the primary focus of the other precious metals.

SILVER

COMEX silver settled with pared losses after a late rise that traders attributed largely to short covering.

An early probe of the downside failed to uncover hoped-for sell stops and prices subsequently drifted higher, eventually forcing shorts to cover their positions, traders said.

September silver settled 1.8 cents lower at $5.637 an ounce, traded between $5.645 and $5.55. December went out 1.6 lower at $5.705, traded from $5.71 to $5.62. Volume was estimated at 29,000 lots, including 2,965 switches, down from Tuesday's official 34,815.

The market remained nervous about the possibility of a squeeze on the September contract after recent drawdowns in COMEX stocks of over 25 million ounces, although data released after today's close showed that 3,261,054 ounces returned to COMEX warehouses on Wednesday.

But the stocks, at 150,689,282 ounces, remained below September's Tuesday open interest of 184.2 million ounces.

"It's hard for silver to make big headway on the downside with the drawdowns in stocks," one bullion dealer said.

"If I were one of the longs, I'd certainly want to take delivery," added George Milling-Stanley of Lehman Brothers. "The logic is inescapable.

Platinum

NYMEX platinum settled weaker but near the top of the day's range, as buoyancy in the silver market after an early probe of the downside helped spur late short covering in all the precious metals, traders said.

They noted that silver was still calling the shots in the precious metal complex, as worries about nearby supply tightness continued to haunt the silver market.

October platinum settled $1.20 lower at $426.80 an ounce, traded between $426.90 and $424.50. Volume was modest at an estimated 2,773 lots, little changed from Tuesday's 2,759.

September palladium went out $0.95 lower at $150.45 an ounce, while December finished $0.85 lower at $151.45.-Reuter