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HK gold

HONG KONG: Hong Kong bullion ended at US$391.10/60 an ounce on Thursday against New York's US$390.80/391.10 close on Wednesday.

Local gold ended HK$1 lower at HK$3,603 a tael.

Gold dealers in the territory said that fund liquidation of gold had increased bearish sentiment in the loco London market but that the general view was confused.

"I really am very puzzled," said a Western trader.

Uncertainty on what positions big speculators in the United States were taking had bred confusion about local market direction, local traders said.

Some traders said the market had dropped in the wake of Australian gold producers selling gold.

"In such a quiet market, every sale could create a negative movement," a bullion dealer said.

The quiet markets in the region have had some impact, as some of the 191 members of the Chinese Gold and Silver Exchange Society seek to sell their seats on the exchange, or cease their gold operations altogether.

"Although it is difficult to apply for an exchange licence, we would like to sell ours because we are no longer active," a source at a Hong Kong firm said.

At least one major bank in the territory has already voted with its feet, electing to reduce its involvement with gold.

Barclay's Bank shut down its gold trading desk in Hong Kong in February this year, moving a skeleton desk to Singapore. "We are scaling down gold activity in Asia," said a Barclay's source in Singapore.

"We used to make markets until last year but we don't anymore," the source said.

He stressed however that Barclays was still a major player in the world gold market and the reduced operation was part of an internal restructuring.

Meanwhile, official statistics show that in the first two months of this year Hong Kong exported a slightly higher quantity of gold bars to China than it imported from across the border during the same period.

In contrast, the value of gold jewellery imported into Hong Kong from China in Jan-Feb 1996 was almost 10 times more than the value of gold jewellery exported from Hong Kong to China:

HONG KONG GOLD CLOSING RATES

LOCAL MARKET (99.00 FINE HK DLRS PER TAEL)

CLOSING: 3603

PREVIOUS CLOSING: 3604

HIGH: 3605

LOW: 3599

INTERNATIONAL (99.5 FINE US DLRS PER OUNCE)

CLOSING: 391.10/391.60

HIGH: 391.20/391.70

LOW: 390.60/391.10

-Reuter