950808

Comex gold

settles with

pared gains

NEW YORK: Comex gold settled with pared gains in thin trade, dealers said on Monday.

The market drifted during the afternoon toward the lower end of a range established early, after a probe of the upside failed to break above last week's highs.

Analysts cited rising expectations of a German interest rate cut at Thursday's Bundesbank meeting as a supportive factor for the precious metal on Monday.

December gold settled $0.30 firmer at $389.60 an ounce, traded between $390.30 and $389.20. October was up $0.30 at $386.70. Volume was light at an estimated 13,000 lots.

Dealers quoted bullion at $383.80/$384.30.

Cash sources noted continued tightness in near-term gold lease rates, which some attributed to fund short positions in the over-the-counter market.

Despite the quiet tone of today's futures market, traders noted a number of events slated for the latter part of the week which may influence the precious metals.

Following the Bundesbank's Thursday meeting, US price and retail sales data will be released Thursday and Friday, while Comex September options will expire after Friday's close.

SILVER

Comex silver settled with pared gains, after rallying at mid-morning to 2-1/2 week highs on stop-loss fund buying, traders said.

Cash sources also noted a steep tightening in nearby lease rates, beginning overnight in London, although they were at a loss to explain the sudden move. One trader cited the tightness as one factor behind this morning's modest rally in the futures price.

On the fundamental side, analysts said rising expectations of a possible interest rate cut at this Thursday's Bundesbank meeting were supportive for the precious metals.

September silver settled 2.8 cents higher at $5.195 an ounce, traded between $5.265 and $5.155. The contango narrowed slightly, with December gaining 2.5 cents to $5.269. Volume was estimated at 17,000 lots, including 2,780 switches, versus Friday's very light 10,668.

Some traders said September silver may hover near the $5.25 an ounce strike price ahead of the Comex September options expiry after Friday's close.

The precious metals may also draw some direction, they said, from US price and retail sales data due Thursday and Friday.

PLATINUM

NYMEX platinum settled slightly weaker after a day of thin, rangebound dealings.

The silver market received most of the attention in the precious metals today, rallying early to 2-1/2 week highs on fund buying. The gold and platinum markets managed only brief, slight gains in sympathy.

All the precious metals drifted lower in the afternoon after silver's rally quickly lost steam.

October platinum settled $0.50 lower at $421.90 an ounce, traded narrowly between $423.50 and $421.50. Volume was very light at an estimated 601 lots, although this was up from Friday's extremely thin 469.

September palladium went out $0.20 firmer at $153.20 an ounce.-Reuter