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Gold settles weaker

NEW YORK: Comex gold settled slightly weaker Wednesday in dull trade, consolidating after the steady declines of the past three sessions, traders said.

The market showed little response to an afternoon rebound in the KR-CRB commodity futures index as grain and petroleum prices recovered from early losses, nor did it gain from a slump in the Dow Industrials, although some traders termed these developments supportive for gold.

June gold ended $0.50 weaker at $393.00 an ounce, traded narrowly from $393.80 to $392.70. Volume was moderate at an estimated 25,000 lots, down from Tuesday's official 50,729.

Dealers quoted bullion at $390.80/$391.10.

Traders noted that spot prices continued to find support above $390, and while some foresaw a further probe lower to $388, they expected any downside moves to be limited.

"We're at the low end of the range for 1996," noted one bullion dealer.

Another trader nevertheless expressed disappointment that the market did not receive more of a bounce after the recent losses, adding that a more concerted assault on the downside may break through nearby support levels.

Cash market sources noted that physical demand was steady at the lower price levels of recent sessions, although it was not enough to counter the flood of selling that emerged Tuesday.

Today's close set a fresh low for the year on a settlement basis, with the June contract losing $5.30 over the last four sessions. On an intraday basis, however, the active futures today held above Tuesday's low of $392.50 and the March 7 low of $392.30.

SILVER

Comex silver settled barely firmer in rangebound trade, as the precious metals consolidated after the losses of recent days, traders said.

May silver ended 1.3 cents higher at $5.305 an ounce, traded from $5.335 to $5.28, a range set by midday. Volume was modest at an estimated 22,000 lots, including 3,059 switches, compared with Tuesday's very heavy 68,388.

The May contract shed 27 cents during the prior three sessions, most of it Tuesday as funds liquidated long positions and initiated new shorts.

Cash traders expected the market to find support at $5.25, however, amid sentiment that the precious metals were at the bottom of their near-term ranges.

An afternoon rebound today in the KR-CRB commodity futures index, as grain and petroleum prices pared or reversed early losses, and a tumble in the stock market sparked little discernible reaction in the precious metal markets, although some traders considered these positive for gold and silver.

In the options market, one trader noted buying from a large trade source of Comex July $5.75 calls.

Comex silver warehouse stocks were unchanged Wednesday, according to data released after the close. Stocks have held mostly steady in recent sessions after falling in March to 9-1/2 year lows.-Reuter