• Thu
  • Dec 18, 2014
  • Updated: 5:35pm

Professionals rule in confused market

PUBLISHED : Thursday, 07 April, 1994, 12:00am
UPDATED : Thursday, 07 April, 1994, 12:00am

DEALING yesterday was largely confined to professionals in London bullion market business after light Middle East buying overnight helped Europe to recover from New York's weaker close.


Gold was fixed at US$385.10 an ounce in the morning against $384.75 on Tuesday afternoon when prices reflected the second successive day of heavy fund liquidation in New York.


The falls since the Easter break had confused the market and slowed trade, dealers said.


Far East business was also quiet with the closing quote in Tokyo standing at $384.50-$384.90, just a few cents over New York.


Dealers were wary of another sell-off in New York, noting that gold was still essentially fund driven.


''People are still thinking bullishly as long as it doesn't break $382,'' one dealer said.


He added that the funds, even after two days of unloading, were still long and making the market cautious.


''There is good physical interest at $383-$384 which could prevent us falling too much further,'' he said.


However if the funds mounted a serious profit-taking raid, physical business would be unable to stop the price collapsing, he added.


Silver was also quiet after taking a second hammering in New York on Tuesday when May futures closed down 3.7 cents at $5.551 an ounce, less than two cents above a support level.


Key support for spot silver was put at $5.45, beneath which a fall to the $5.20s was expected.


''Silver is still the key to the sector,'' one dealer said, but technical analysts noted that its more recent charts were showing that upward price momentum was decelerating.


''Silver is a bit artificial just now. It is very paper-driven,'' one dealer said.


Hanging over the market was the hefty buying of $6 calls last week. Option-related liquidation could put downward pressure on prices with silver hovering around 50 cents below that level, dealers said.


Platinum was barely changed after a weak close on NYMEX and a quiet session in Tokyo. It was at $407.50-$408.50 an ounce, down $1, while palladium was also $1 weaker at $133.50-$134.50.


In New York, COMEX gold was barely firmer in choppy early trade. Trade selling quickly knocked the market from early highs scaled on buying apparently linked to a fund, floor sources said.


One source said the choppy trade reflected nervousness and uncertainty in the ring after the recent sell-off in gold.


Active June gold was 40 cents firmer at $387.10 an ounce, after trading between $389.20 and $386.70.


Dealers quoted bullion at $384.70-$385.20.


A commission house analyst said weakness in the silver market, due in part to the unloading of delta hedges ahead of tomorrow's COMEX options expiry, also weighed on gold.


Analysts saw near-term support for June gold at $385.


Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

Login

SCMP.com Account

or