960415

Gold fixes easier,

bounces after

testing support

LONDON: London gold bounced gently after gingerly testing support in a quiet market jogged by some producer selling and fund liquidation, dealers said.

Bullion fixed barely weeker at $393.20 per ounce, bouncing after testing support of $392.60. Bids were recorded so far from $394.30 to $392.40.

"There has been some fund liquidation, and the rand has been under pressure so that may have been encouraging producer selling, plus some fresh professional selling," a dealer said.

On Comex gold fell sharply in early trading, which market sources attributed to speculative liquidation.

London dealers said fresh downside movement was likely in the short term, possibly testing stops as low as $388 before recovering by the end of the week.

The rand, at record lows, was luring South African producers to take advantage of high local gold prices, dealers said.

Profit taking by Japanese players was also factoring in.

"There's going to be a push lower in the first half of the week but it should turn around towards the end," a dealer said.

He noted that bullion had strong support at $392, but said gold could easily dip as low as $388 in the next few days before recovering again. Resistance was seen at $396.

However, dealers and analysts said European markets were mostly quiet and they did not see any significant quick moves.

In the longer term, gold could benefit if tensions escalate in the Middle East and between North and South Korea, a dealer said. The stock market could also be a factor medium term.

"It's going to be a difficult summer for the Dow and you'll see people leaving the Dow and going to gold," one dealer said.

Other precious metals were mostly easier and seemed to mostly follow gold by dipping slightly, then recovering.

Silver was weaker, and analysts said it could break support of $5.45. Bids were quoted so far from $5.50 to $5.45.

Platinum was trading all day within a very narrow range and was last at $405.05/$406.05.

Japanese speculators were believed to be very long of platinum and could be preparing to take advantage of a weaker yen to take profits.

"They have the biggest long position ever and I wouldn't be surprised to see (the price) come down," he said.

Bids were quoted at between $405.75 and $403.85.

Palladium was rangebound, with bids recorded so far from $137.25 to $136.00. It was last at $136.00/$137.00.-Reuter