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Gold weakens at midday in silver's shadow

NEW YORK: COMEX gold weakened at midday in dull trade, holding to relatively narrow ranges as it continued to shadow movements in the volatile silver market.

At 1230 EDT, December gold was off $0.40 at $388.00 an ounce, traded between $389.40 and $387.60.

Dealers quoted bullion at $382.90/$383.40.

Analysts said the gold market showed little reaction to a German interest rate cut overnight and this morning's below-forecast U.S. durable goods data, as players continued to focus on silver and signs of nearby supply tightness in that market.

silver

COMEX silver turned barely weaker at midday in thin, choppy trade, although traders said the market remained supported on dips amid continued worries about nearby supply tightness.

Data released this morning showed a drop Wednesday of 2,243 lots in September's open interest to 34,598, or 172.99 million ounces, versus

One floor source added that nearby support for September was expected in the $5.55 to $5.48 zone, although he did not expect a large volume of sell stops to materialize until prices reached $5.40.-Reuter