PRECIOUS METALS: Comex Gold Lifted By Bargain Hunting
Mon, Oct 20 2008, 18:23 GMT
http://www.djnewswires.com/eu/
PRECIOUS METALS: Comex Gold Lifted By Bargain Hunting
By Allen Sykora
Of DOW JONES NEWSWIRES
Gold futures managed a gain Monday as buying continued to emerge on any pullbacks, enabling the metal to rise despite a sharp gain in the U.S. dollar, analysts said.
December gold rose $2.30 to $790 an ounce on the Comex division of the New York Mercantile Exchange. December silver climbed 35.5 cents to $9.69 an ounce.
Some of the selling pressure lately seems to have subsided, even though it may still be capping rallies, said Dave Meger, senior metals analyst with Alaron Trading. Also significant, he continued, is the bargain hunting occurring on pullbacks.
"The aggressive selling pressure coming from a firm dollar and liquidation to get cash, at least for the moment, seems to have subsided," Meger said. "That, in my opinion, was the most noteworthy aspect of today. We didn't see that constant pressure from liquidation that you had been seeing over the last several weeks."
Some of this, he continued, may be the result of the steadier tone in equities, meaning market participants don't feel pressured to sell holdings in other markets to raise cash.
"On the back of that, we saw a little bit of short covering and a bounce higher in both gold and silver," he continued.
Silver, which recently had underperformed gold due to worries about industrial demand in an economic slowdown, appeared to bounce back more aggressively than gold, Meger added.
Comex gold is largely range-bound at the moment, said Zachary Oxman, senior trader with Wisdom Financial. He puts the bottom end around $760 and the top end around $920.
"The dollar strength is probably holding it down a little bit," he said. Shortly before the metal closed, the dollar index was up 0.797 point to 83.210.
Nevertheless, Meger said it is significant that gold was able to hold up in the face of the dollar gains, especially since a weaker dollar so often was cited as the main catalyst for gold's several-year bull run through this summer.
Meanwhile, January platinum rose $11.50 to $892.50 an ounce, while December palladium gained $5.55 to $180.05.
These metals initially bounced during the night on what traders described as bargain hunting and some optimism due to strength in Asian stock markets, especially after moves by South Korea to shore up its banking sector, one trader said. But the metals eventually pared their gains as other commodities did likewise, the trader added.
Settlements (includes open-outcry and electronic trading):
London PM Gold Fix: $795 versus $784.50 on Friday
Spot gold at 1:32 p.m. ET: $789.95, up $6.20 from previous day; Range: $782.05-$810.30
December gold: $790, up $2.30; Range $782.80-$811.80
December silver: $9.69, up 35.5 cents; Range $9.35-$9.915
January platinum: $892.50, up $11.50; Range $875-$939.90
December palladium: $180.05, up $5.55; Range $176.50-$185.90
-By Allen Sykora, Dow Jones Newswires; 541-318-8765; allen.sykora@dowjones.com
(END) Dow Jones Newswires
October 20, 2008 14:23 ET (18:23 GMT)
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