To:Leman who wrote (148)
From: John Barendrecht Tuesday, Jun 24, 1997 5:46 PM
Respond to of 79915
NY precious metals end lower, except palladium
NEW YORK, June 24 (Reuter) - COMEX and NYMEX precious metals futures ended lower Tuesday on moderate volumes, with the exception of palladium, as the U.S. dollar rose, and confidence returned to equity and debt markets following Monday's sharp fall in the Dow Jones Industrial Average.
``There's probably good reason to still be bearish about gold, as the cloud of central bank selling hanging over the market is not dissipating,'' Chase Manhattan global managing director of commodities, Dinsa Mehta, said.
``It's questionable whether gold will go significantly lower, but it may be that we'll finally see a break of the $340 level in a spike lower,'' he said.
COMEX August gold ended down $1.60 at $339.40 an ounce, retreating from an early session high at $343.20 toward the life-of-contract lows at $338.50 seen Monday.
In the bullion market, spot gold ended quoted $337.50/00, after gold fixed in London Tuesday afternoon at $338.35 an ounce. Earlier on Monday morning gold fixed at $336.95 an ounce, its lowest levels since February 12, when gold fixed at a four year low at $336.90.
``With the bulls running wild in the equity markets during most of the last two years, it has been easy for gold bugs to stay in hibernation,'' one investment bank analyst said.
``The lingering threat of additional central bank sales, increased producer hedging, low inflation, a surging dollar, and gold's recent inability to get a boost from political turmoil, have all contributed to sharply negative sentiment toward gold.''
But the bearish mood was briefly interrupted late Monday by comments by Japanese Prime Minister Hashimoto suggesting Japan had been tempted in the past to sell U.S. Treasuries and switch reserves into gold.
IMF data shows that as of June 1996 Japan's gold reserves totalled 754 tonnes, well below Germany's 2,960 tonnes, France's 2,546 tonnes and the U.S. holdings of 8,140 tonnes.
Last year official sector gold sales amounted to a net 239 tonnes, compared with the ten-year average of net official sector sales of 213 tonnes, according to industry consultants, Goldfield Mineral Services (GFMS) in a report in May.
Sixteen countries sold gold in 1996, but 19 countries were buyers, with China and Russia prominent, GFMS said.
``There has been some Asian central bank buying again recently,'' one New York bullion banker said.
``In addition, there has been some heavy scale-down buying from the Middle East recently below $340 an ounce in the bullion market, but they won't chase it,'' he said.
Meanwhile, COMEX July silver ended down 6.2 cents at $4.745 an ounce Tuesday. First notice day for the July contract is June 30. July silver is still seen trapped in its $4.65-4.90 range of the past six weeks.
NYMEX July platinum lost $5.80 to close at $409.50, but NYMEX September palladium gained $2.35 to end at $179.00.
In news Tuesday, the deputy director of Almaz, Russia's precious metal export agency, would not say when deliveries of platinum group metals (PGM) would resume and reiterated that 1997 exports would be lower than in 1996.
Russian PGM exports, suspended for five months, were expected to resume in late June. Russia supplies about 60 pct of the world's palladium and 20 pct of its platinum.
But the platinum market is likely to swing into a supply/demand deficit in 1997 for the first time since 1985, while the palladium market surplus is seen shrinking, as supplies contract for the first time since 1988, New York-based industry consultants CPM Group said in its 1997 platinum group metal (PGM) market survey published Monday.
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