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Gold cautious before UK sale
01/03/2002 01:55 - (SA)
New York - COMEX gold was constrained by the approach of Britain's final 20-tons bullion auction on Tuesday.
April gold ended up 50c at $297.10 an ounce, consolidating between $298.50 and $296.30 after Wednesday's brief flirtation with $300.
Spot gold was quoted late at $296.50/7.20, up from the close at $295.90/6.40 on Wednesday and the late fix at $296.85.
The floor continued to buzz about options interest and the purchase of $295 and $325 calls on Wednesday, after a chunky bullish call option transaction went through late last week.
Some were puzzled by the timing of such a transaction so close to a Bank of England auction, which in most previous instances the market approached from the short side.
"The market is aware that central bank sales are a threat to the market and yet we see continued buying," said Ian MacDonald, head of bullion dealing at Commerzbank. "I would say it will probably be a constraint next Tuesday. I would expect the market to dip in front of the auction, so everyone can buy it in nice and cheap, as in the last couple of times."
Britain's disposal on Tuesday concludes a controversial three-year program to reduce its gold reserves by more than half to 300 tonnes and put the proceeds in higher-yielding dollar, yen and euro investments.
NYMEX platinum flirted with $500 an ounce, trying to extend Wednesday's rally on the back of industrial demand and talk of interest from China's jewellery sector.
But April platinum settled down $7.90 at $487.90 an ounce, after setting a new contract high at $499.50 in overnight ACCESS trade. Spot platinum was last quoted at $485/495.
June palladium hardly traded and closed down $10.20 at $370.80 an ounce. First notice day for March pallium is Friday. Spot palladium went out at $373/383.
- Reuters
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