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Gold remains weaker

NEW YORK: COMEX gold was barely weaker at midday in quiet trade, bouncing lightly from an early probe of the downside in thin, pre-holiday trade, traders said.

Weakness in the silver ring, where players noted sizable fund selling, was said to be weighing on sentiment in gold as well.

At 1245 EST, June gold was off $0.20 at $396.60 an ounce, traded from $397.20 to $395.70, matching Tuesday's four-week low.

Dealers quoted bullion at $393.80/$394.30.

Floor sources said substantial sell stops were expected under $395 in June futures, with some predicting players would try to take them out in the near term. One trader pegged next support at $394.

Gold's open interest Wednesday rose sharply by 7,994 lots to 197,379, with most of the gains in December delivery. Traders attributed the rise in part to selling of the August-December spread on Wednesday.

The increase reversed a recent downtrend that Tuesday saw open interest dip below 190,000 to its lowest level in nearly three months.-Reuter