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G. Chandrashekhar

MUMBAI, Sept. 29

FOLLOWING on from previous week's firm close, gold began the week rather strongly. After a rally above $325 an ounce, prices stalled below $328/oz.

The yellow metal drew strength from a combination of factors including possible US military action against Iraq, firm crude oil prices (around $30 a barrel) and weak equity markets that encouraged short covering, plus modest fresh long buying.

However, from mid-week, gold prices fell back following rebound in the stock market in the US and Europe.

Long liquidation and profit taking aided the sentiment. Gold equities also fell back sharply.

Earlier, the latest Comex futures only net position of large speculators in gold had increased by a further 16.7 tonnes to 78.3 tonnes during the week to September 17.

On Friday, the official price of gold was $320.05/oz (London PM fix), down 0.7 per cent week-on-week.

The white metals also lost ground over the week with the trend in gold and in base metals not helping price support.

Silver fell back as the price trend continued to follow gold. Silver moved first below its 40-day moving average at $4.54/oz on Thursday and then below $4.50/oz on Friday.

Both platinum and palladium lost ground last week.

The push in platinum stalled and prices eased back below $560/oz, but retain a firm tone, while palladium suffered from industrial concerns (weakening US auto sales) to fall towards $310/oz.

On Friday, platinum closed at $560/oz (-1.0 per cent) and palladium at $316/oz (-5.1 per cent).

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