The Hindu Business Line : Gold holds on to $300/oz

GOLD continued to hover around $300 an ounce the whole of last week, holding well within the trading range of $295-302/oz. Buying interest was evident, but not enough to test upper resistance levels. The yellow metal ended on a weak note in London. The official Friday price was $299.85/oz (London PM fix).

``Support came from some tight lease rates earlier in the week, continued buying from Japan and some buying interest from at least one bullion bank. Selling has been a combination of profit-taking and some producer activity, although volumes were modest'', Mr Kamal Naqvi, analyst with Macquarie Research Equities explained.

With the exception of Japan, buying has reduced significantly in most other Asian and Middle Eastern markets at the current high prices, with an increase in scrap selling also noted. However, the market behaviour has been orderly.

The last Comex commitment of traders report confirmed that fresh long buying of gold returned to drive the net long position from 38.7 tonnes to 106.0 tonnes, as of February 5, the largest net long position since October 2, 2001. With large net long position the market in the past usually retraced the price. Whether it will happen this time too remains to be seen, the analyst said.

Silver gained in the second-half of the week due to the strength in gold and with borrowing demand helping to stay above $4.50/oz. The metal gained 4.6 per cent week-on-week to record $4.58/oz (London AM fix) on Friday.

``Traders are nervous about holding large short positions in silver given the potential to be caught again in a silver lease rate squeeze and this is helping silver. However, we remain sceptical about its prospects given the metal's negative fundamentals'', Mr Naqvi explained.

Platinum and palladium were both firmer last week, gaining buying interest due partly to the strength in gold and in line with firmer investor interest.

Platinum gained 0.6 per cent to close at $477/oz and palladium at $380/oz, gaining 1.9 per cent week-on-week.

Send this article to Friends by E-Mail

Stories in this Section
Farmers at work

Demand for leaf teas at Kochi sale

`Ban meat exports'

Gold holds on to $300/oz

Bed linen exports -- Textile body shocked at EU anti-dumping review

Cotton futures to firm up

Palm oil futures to head lower

Edible oil import fall continues in January

KCB `cure and sell' plan for small growers

Brazil catches 'em young -- To expand coffee consumer base

Coffee promotion to get boost in Tenth Plan

`Sell the story for speciality coffee'