To:PSkars who wrote (129)
From: John Barendrecht Monday, Jun 23, 1997 6:20 PM
Respond to of 79913
NY precious metals bounce back to end higher
NEW YORK, June 23 (Reuter) - COMEX and NYMEX precious metals futures ended higher across the board Monday, with gold and silver recovering from Friday's weakness, and platinum group metals (PGMs) continuing to edge back up with no sign yet of the return of Russia to the market.
``Gold remains problematic, with bullion bankers very pessimistic at last week's Financial Times gold conference in Prague,'' one bullion banker said.
``But we saw a good bounce today, helped by fund shortcovering and talk of Middle Eastern investment buying in the bullion market below $340 an ounce,'' he said.
``What worries me though is that producer hedge books are running down, with North American producers seen likely to put hedges on again not far above current levels,'' he said.
COMEX August gold ended up $1.70 at $341.00 an ounce, after swinging from a new contract low early at $338.50 to a session high at $341.40 near close, with one bid for 5,000 lots seen briefly from a fund broker at the close.
COMEX gold saw a further jump in open interest Friday of 6,949 lots to 183,266 contracts, following a jump of over 10,000 contracts last Wednesday, suggesting increasing shorting by funds, but funds were forced to cover some short positions Monday due to the lack of downside follow through, analysts said.
In the bullion market, spot gold ended quoted $339.10/60, after gold fixed in London Monday afternoon at $338.00 an ounce.
Earlier gold had fixed at $336.95 at the morning fix, the lowest fix since February 12 this year when gold fixed at a four year low of $336.90. In New York Friday spot gold closed quoted $337.40/90, its lowest weekly close since April 1993.
Reports that Japanese prime minister Hashimoto, speaking at Columbia University in New York, had suggested Japan might be tempted to sell U.S. Treasury securities and switch foreign reserves to gold, if the U.S. did not help maintain exchange rate stability, also helped gold Monday, analysts said.
COMEX July silver closed up 10.00 cents at $4.810 an ounce, its highest close since May 29, with one commission house seen actively covering short positions in July silver ahead of first notice day on June 30.
But July silver is still seen trapped in its $4.65-4.90 range of the past six weeks.
The CFTC data Friday showed funds remained net neutral in COMEX silver as of June 17.
``It was a good close in both gold and silver, but I'n not sure we're out of the wood's yet,'' said Scott Myers, an analyst with Pioneer Futures in New York.
NYMEX July platinum ended unchanged at $415.20 an ounce, after seeing a session high at $418.50.
Open interest in July platinum continued to fall Friday, ahead of the upcoming delivery period for the contract, but open interest rose in the back months of October and January.
NYMEX September palladium gained $3.70 to close at $176.55 an ounce.
In the physical market, the acute shortage of metal is keeping short term PGM lease rates high, with one month palladium around 130 pct still Monday morning and one month platinum around 75 pct, refining sources said.
Russian PGM exports, suspended for five months, are due to resume in late June.
Reports Monday suggested Russian export agency Almaz had signed contracts for palladium deliveries with about 50 of its usual customers, and had obtained an export licence last Thursday, with deliveries planned for later this week.
Russia supplies about 60 pct of the world's palladium and 25 pct of its platinum.
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