960422

Gold quietly steady

LONDON: Gold firmed slightly in quiet trading on shortcovering, with the potential for a bounce to $392 or beyond, dealers said.

"The market is very quiet, quietly steady. We're going up from lows of last week on the back of ealier shortcovering by dealers getting too short," one dealer said.

Many dealers had been looking for bullion to drop to $388 per ounce last week, when prices sank to the lowest of the year below $390, he added.

Bullion was fixed at $391.00 compared to $390.70 in the morning and $390.90 on Friday afternoon.

Dealers saw gold testing $392, or possibly $395, a price not seen since April 12.

"But that could be a little hopeful," a dealer said, adding that trading so far had been mostly rangebound.

Support was seen at $390, with good buying seen below the market.

Some dealers said they were waiting for Comex to set the pace before any real market movement took place. Fund selling in New York was still expected to put pressure on gold.

But others said New York dealers were in the same position and looked for the price to stay steady or climb slightly.

"There's a bit of range trading going on and it seems Comex is looking at the same sort of thing," a dealer said.

Comex June gold was up $0.40 at $393.10 in the morning.

Analysts said that possible sales of some gold reserves by the International Monetary Fund, under discussion at a Spring meeting this week, were unlikely to register on the gold market.

"We're talking about some 150 tonnes over five years which in terms of the bullion market is immaterial," said Rhona O'Connell, a metals analyst at T.Hoare and Co.

The proposal, aimed at helping poor countries, was opposed by influential German and Italian officials.

Bids were recorded so far at $391.90 to $390.

Silver was three cents stronger at $5.31/$5.33, with bids quoted so far at between $5.32 and $5.26.

Dealers said silver could test $5.34/$5.35, with support seen at $5.25.

Platium was firmly above the psychological $400 level, with bids recorded so far between $404.25 and $399.50. Resistance was seen at $406/$407.

Palladium was barely changed with bids quoted so far in a range of $134 and $131.50.-Reuter