960423

Gold shows firmness

on lighht support from

surging grain prices

NEW YORK: Comex gold settled modestly firmer, drawing only light support from a renewed surge in commodity prices that pushed the KR-CRB index of commodity futures to new eight-year highs.

Gold proved unable to break decisively through resistance at $394 an ounce in the active June futures, despite afternoon gains in silver prices as the KR-CRB rallied.

June gold settled $0.90 firmer at $393.60 an ounce, traded from $394.10 to $392.70. Volume was modest at an estimated 21,000 lots, up slightly from Friday's light 18,416.

Dealers quoted bullion at $391.40/$391.70.

The KR-CRB surged more than four points to an intraday high of 261.96, its highest since July 1988, as grains rallied and 15 of the index's 17 components were higher or mixed.

Bullion dealers noted steady selling capping the spot gold price today at $392, although it was unclear whether the selling was coming from producers.

One trader said South African mine selling appeared to be steadily trickling into the market, which was also heavy with expectations that North American producers had selling to do.

He added that there still appeared to be stale longs hanging over the market.

Traders generally downplayed the impact of a proposed IMF gold sale on the market. Noting continued opposition from several European nations, they said the proposal still faced an uphill battle and was unlikely to receive swift approval.

Nevertheless, the support the proposal received from some quarters, including IMF managing director Michel Camdessus, was said to be undermining gold market psychology.

Traders noted a slight easing of lease rates today as borrowing entered the market, while option volatilities also edged marginally lower.

SILVER

NEW YORK: Comex silver settled higher, buoyed, traders said, by a strong rally in the grain markets that lifted the KR-CRB commodity futures index to fresh eight-year highs.

May silver settled 6.8 cents firmer at $5.325 an ounce, traded from $5.34 to $5.27. July was up 6.8 cents at $5.375. Volume was modest at an estimated 20,000 lots, including 3,328 switches as players rolled positions into July from May ahead of first notice day next week.

Silver outperformed the gold market, which met with steady selling at nearby resistance levels. Traders said the white metals appeared to draw more strength from the KR-CRB surge, as well as sentiment that the precious metals had bottomed after last week's steady slide to the lowest levels since the beginning of the year.

Comex silver warehouse stocks Monday continued the gradual but steady increase of the past few days, rising 1,218,502 ounces to 142,616,775, according to data released after the close.

PLATINUM

NEW YORK: NYMEX platinum settled higher, as the market appeared to be forming a base after last week's steady slide, traders said.

The precious metals sector was also buoyed by a strong rally in grain prices and the KR-CRB index of commodity futures, which hit fresh eight-year highs.

July platinum settled $3.70 higher at $408.00 an ounce, traded from $409.30, a one-week high, to $404.00. The contract hit a lifetime low of $401 last Friday.

Monday's volume was moderate at an estimated 2,768 lots, down from Friday's official turnover of 3,650.

Gold lagged the white metals in today's trade, with July platinum's premium over June gold widening $2.80 to $14.40. The spread slipped below the $10 support level late last week.

June palladium settled $1.95 higher at $135.85 an ounce, bouncing from a fresh 1-1/2-month low of $132.75 hit early.-Reuter