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Comex gold settles

firmer with silver

NEW YORK: Comex gold settled firmer on Tuesday, buoyed by strength in silver, traders said, although the market remained confined to a narrow range after an early probe of the upside ran out of steam.

Silver continued to dominate talk among New York bullion dealers as nearby lease rates rose for the second consecutive session, despite a modest easing in rates overnight.

December gold settled $0.80 firmer at $390.40 an ounce, traded between $391.00, a two-week high, and $389.70. A low of $389.60 was set on ACCESS overnight. Volume was light at an estimated 13,000, although this was up from Monday's 10,998.

Dealers quoted bullion at $384.50/$385.00.

Traders saw little on the fundamental side to give direction to gold today, although strength in the XAU index of North American mining shares was termed supportive. The index at one point this afternoon was up nearly three points, although this was still below Monday's high of 124.70.

Cash dealers pegged a near-term range for spot gold at $385 to $382.

The market will be watching for possible German interest rate cuts, with a small cut in the repo rate seen likely Wednesday while Thursday's Bundesbank council meeting was expected to leave official rates unchanged.

U.S. price and retail sales data are due Thursday and Friday, followed by the expiry of Comex September options after Friday's close.

SILVER COMEX silver settled firmer but within a range established early, after an early rally to fresh three-week highs ran out of steam, traders said.

The market continued to buzz with talk about short-term silver lease rates, which rose for the second consecutive session despite an easing overnight.

Although bullion dealers were wary of the move and at a loss to explain it, many expected the nearby tightness to be short-lived.

September silver settled 5.3 cents higher at $5.248 an ounce, traded between $5.28 and $5.205, a range set by midday. A low of $5.195 was hit on ACCESS trade overnight. The spreads narrowed, with December gaining 4.7 cents to $5.316.

Volume was moderate at an estimated 19,000 lots, including a large number of switches, pegged at 4,233 lots.

Dealers also noted a widening of the premium of cash to the September futures, with the exchange-for-physical pegged at minus three cents.

PLATINUM

NYMEX platinum settled slightly firmer in thin, rangebound dealings, buoyed by modest strength in the silver market, traders said.

Most-active October platinum settled $0.60 higher at $422.50 an ounce, traded between $423.00 and $420.50. Volume was light at an estimated 954 lots, although this was up from Monday's very thin 600.

The October contract has held to a very narrow $424.00 to $420.50 range for the past five sessions, as the market seeks to build a base after fund-led selloffs in recent weeks.

September palladium went out $0.20 weaker at $153.00 an ounce.-Reuter