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Mir Hamza

Gold slips further

NEW YORK: Comex gold slipped further at midday, virtually erasing the gains from Monday's rally amid apparent fund long liquidation, traders said.

Floor traders noted selling from a source that bought heavily at Monday's close.

The market was under pressure from early in the session, after Monday's late rally failed to attract follow-through buying this morning.

At 1255 EDT, active June gold was off $8.40 at $398.30 an ounce, having traded as low as $397.70.

Dealers quoted bullion at $395.35/$395.85.

Monday's open interest surged 6,525 lots to 203,277, according to data released this morning, suggesting a sizeable influx of long positions during the rally.

The stock market was largely holding steady today after Monday's declines, with the Dow Industrials off slightly, while the KR-CRB index of commodity futures retraced modestly after climbing Monday to its highest levels in nearly eight years.

Yesterday's tumble in stocks and the KR-CRB's gains were cited as supportive factors for gold.

SILVER

Comex silver tumbled at midday, following gold lower and triggering sell-stops as it broke through a nearby support level, traders said.

Fund selling pressured the market on the way down, while trade buying helped prices stabilize.

At 1325 EDT, May silver was off 9.0 cents at $5.475 an ounce, traded from $5.555 to $5.46.

One floor source noted stops triggered at $5.47, which he said would be a pivot point for today's trade. Nearby resistance was pegged at $5.52/$5.51.-Reuter