To:Bobby Yellin who wrote (204)
From: John Barendrecht Saturday, Jul 5, 1997 12:44 AM
Respond to of 79916
Gold tentatively off overnight lows
By Miranda Maxwell, Bridge News
By Miranda Maxwell, Bridge News
London--Jly 4--The freefall seen in gold in the aftermath of Australia's central bank sale announcement Thursday showed signs slowed in late morning trade in Europe during a quiet session ahead of a holiday in the US. * * *
The Reserve Bank of Australia announced Thursday it sold 167 tonnes of gold during the past 6 months, reducing its total reserve to 80 tonnes.
Spot gold recovered to trade at US $324.25-324.75 per ounce at one stage this morning but later fell back to $323.50-324.00, down over $10 from the highs this week.
The $323-level is the lowest trade since $318.60 in December, 1985. During that year, gold fell to a low of $284.25 in February. It regained footing above $300 in March, 1985 and peaked at almost $500 in December, 1987.
The selling seen in the last hour of New York trade Thursday and overnight continued early today in Europe.
"There was a lot on offer even before trade started this morning at around $325.50," said one dealer. However, he said prices were unlikely to fall lower again this afternoon as New York trade is closed for US Independence Day.
"In half an hour the market will be pretty much closed up for the holiday," he said.
Looking ahead, dealers expected a continuation of the selling and one pegged support at $303-313. "In the longer term, it doesn't look in good shape. Australia has shown the entire world and other central banks that nothing is sacred," he said.
Sources were particularly surprised that a nation in which gold production is so significant had sold. "The other central bankers will be saying 'if they can do it, why can't I?'," suggested one dealer.
"We will get a bounce, but it's a question of how large that will be," he said, adding that prices were unlikely to recover above $331-332.
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