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Gold prices weaker

in dull trade

NEW YORK: Comex gold closed barely weaker after a day of dull trade on Thursday, as modest early gains scored in sympathy with silver proved unsustainable.

Some traders attributed the precious metals' early firmness in part to a German interest rate cut overnight, although many analysts and traders downplayed the move as the markets continued to focus on signs of tight silver supplies.

December gold settled $0.50 lower at $387.90 an ounce, traded between $389.40 and $387.60, a range set by midday. Volume was modest at an estimated 18,000 lots, up slightly from Wednesday's official 15,347. Dealers quoted bullion at $383.00/$383.50.

Germany's Bundesbank announced before this morning's opening a 50-basis-point cut in both the discount and Lombard rates. Lower interest rates are often supportive for gold.

In the options market, traders noted modest commission house buying of April $450 call options on Comex.

SILVER

Comex silver settled slightly weaker, drifting through most of the afternoon at lower levels after a morning of thin, choppy trade.

Some traders said fears of a squeeze on the September contract, which enters notice period next Thursday, eased somewhat as Comex warehouse stocks rose modestly in the last two days and a large number of contracts today appeared to be rolled forward from September into December.

Floor sources noted the September-December spread widening today, reaching 7.80 cents bid at one point, versus Wednesday's close of 6.80 bid.

Date released after today's close showed a modest rise in Comex warehouse stocks today of about 600,000 ounces, following a gain of over three million ounces Wednesday. The warehouses shed over 25 million ounces in the prior four days.

September silver settled 3.0 cents lower at $5.607 an ounce, traded between $5.725 and $5.575, a range set by midday. December was off 2.3 at $5.682, traded from $5.805 to $5.65. Volume was estimated at 33,000 lots, including 6,357 switches, reflecting apparent heavy buying of September-December spreads.

PLATINUM

NEW YORK: NYMEX platinum settled with strong gains after maintaining most of the gains from an early rally despite a retracement in silver prices.

Traders attributed the strength to worries about labour unrest at South Africa's Impala Platinum, although news after the market closed indicated that a strike at an Impala refinery had been settled.

One trader said players were cautious about shorting the market amid the labour concerns, although he said any easing of the situation could cause platinum prices again to begin moving in tandem with silver.

October platinum settled $4.50 higher at $431.30 an ounce, traded between $435.00, a one-month high, and $428.00. Volume was heavy at an estimated 4,429 lots versus Wednesday's 2,789.

September palladium went out $0.55 lower at $149.90 an ounce, while December was up $0.10 at $151.55.-Reuter