960409

Gold upside to be

limited at $420

for '96-Sumitomo

TOKYO: Japan's Sumitomo Corp 8053.T said on Tuesday it expected world gold prices to move in a range of between $370 and $420 per ounce in calendar 1996, compared with an average price of $385 last year.

The leading metal trader also said in a report that the gold market would be capped as sales by producers and central banks were expected to emerge at the upper resistance level between $410 and $420.

At 0600 GMT on Tuesday, spot gold was traded in Tokyo at $398.10/40 per ounce.

"Central banks are expected to sell substantial amounts of gold this year when the spot gold price breaks above $400 per ounce," Sumitomo said in the report.

It said the expected price rise of gold this year was largely attributable to declining gold supply, mainly from South Africa, and robust physical demand.

On the demand side, Sumitomo said world gold demand for jewellery and industrial use was unlikely to be affected significantly by higher prices. But gold demand for investment was expected to ebb one prices rose above $400, it added.-Reuter