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Comex gold

prices soar

NEW YORK: Comex gold settled sharply higher and above the closely watched $400 an ounce mark for the first time in nearly two weeks, buoyed by a tumble in the stock market and surging commodity prices, traders said.

Several were wary of the gains, however, noting that for the second session in a row well-timed fund buying emerged just minutes before the close to force the market higher.

Most-active June gold settled $3.10 higher at $400.70 an ounce, near the top of the day's $401.00 to $397.10 range. Volume was modest, given the magnitude of the move, at an estimated 23,000 lots, up slightly from Thursday's 20,074.

Dealers quoted bullion at $397.80/$398.10.

The stock market tumbled today, with the Dow Industrials off more than 140 points at mid-afternoon as the market got its first chance to react to very strong U.S. jobs data released last Friday. The data fueled expectations that interest rates would move higher.

The KR-CRB index of commodity futures also scored strong gains this afternoon, reaching fresh 7-1/2-year highs as the grain and petroleum sectors rallied.

Also lifting gold was resilience in gold mining equities despite the broader stock market's tumble. The Philadelphia Stock Exchange's volatile XAU index of North American mining shares surged 5.15 to 148.35.

The gold market's gains had been modest, however, until last-minute buying attributed to fund sources.

Pointing to a paring of losses in the stock market after the gold market's close, however, some traders said a further recovery in stocks may spur today's gold buyers to take profits.

Traders said the options and forwards markets were relatively quiet today, with some buying noted in near-term $400 call options.

SILVER

Comex silver settled sharply higher on Monday, as the precious metals received a lift from the tumbling stock market and strong gains in commodity prices, traders said.

The market received an extra lift near the close as fund buying emerged in the neighboring gold ring, although volumes were termed light given the magnitude of the price move.

May silver ended 13.0 cents higher at $5.565 an ounce, near the top of the day's $5.57 to $5.475 range. Volume was thin at an estimated 10,000 lots, down from Thursday's heavy 33,052.

Traders pegged support around $5.48, while next resistance was seen at $5.59.

COMEX warehouse data released after the close showed a rise of 1,671,762 ounces to 141,123,833, the first sizable increase in stocks in three weeks.

PLATINUM

NYMEX platinum settled modestly higher Monday, rising in tandem with gold and silver as a tumble in stock prices and rallies in grains and crude oil buoyed sentiment in the precious metals, traders said.

Platinum tended to lag the other metals, however, due to a lack of investor interest that traders attributed in part to sluggish industrial demand.

"I think one of the problems platinum has is that industrial offtake just is not as vigorous as the funds would like to see," one trader said.

In addition, most of gold's strong gains today occurred in the final minutes of trade, giving other markets little time to react.

July platinum settled $2.60 higher at $412.40 an ounce, traded from $412.50 to $409.80, a range set by midday. Volume was light at an estimated 1,209 lots, little changed from Thursday's 1,368.

The premium to June gold contracted $0.50 to $11.70.

"Now that the spread between gold and platinum is as narrow as it is, platinum should have some room on the upside," said one market source. He pegged next resistance levels for the July contract at $413.50 and $415.00.

June palladium ended $1.35 higher at $142.60 an ounce.-Reuter