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Comex gold slightly rattled by Austria bullion news

NEW YORK: Comex gold slipped on Monday, nonchalantly adjusting to news the Austrian National Bank recently sold 30 tonnes of bullion, and plans sales of 60 more tonnes by by 2004, dealers said.

But the market mood was sombre after last week's drop to a six-month low on Bank of France sales jitters.

June gold fell $1.00 to $280.40 an ounce, trading between $282 and $279.70 with traders lamenting a lack of activity.

Spot bullion was last indicated at $277.70/8.70, little changed from its previous close at $277.80/8.90 and the $277.50 late fix.

The Austrian central bank said that the 90-tonne reduction, which will lower reserves to 320 tonnes upon completion in 2004, will adhere to the September pact by 15 European central banks to restrict annual sales at 400 tonnes for five years.

"It's really having, on the whole, very little impact, particularly since these countries are signatories to the Sept 26 agreement," said Marshall Steeves, analysts at Refco Inc.

The Austrian gold will blend with bullion already coming to market via regular disposals from the Bank of England, which is due to sell another 25 tonnes in May, as well as the Dutch central bank.

Austrian national Bank Director Peter Zoellner told Reuters the disposals were part of a seven-year-old portfolio management policy, in which 30 tonnes to 50 tonnes had been sold through the Bank for International Settlements each year since 1993.

"It's not new news but it's not good news," said Drummond Gill, head of North American spot trade at ScotiaMocatta.

Zoellner said that Monday's announcement meant sales would actually slow over the next four years.

Traders said the sale would have little impact on liquidity in the 900-tonne-a-day bullion market. But they said the news came as sentiment was at a low, tipped from neutrality to bearishness last week by a report the French central bank was also planning sales.

Meanwhile the first Swiss National Bank sale under a plan to halve Switzerland's 2,600 tonne reserve is likely later this month.

"With regard to the Swiss sales, the market is waiting to see how they are going to go about it and the timing of it," said Steeves. "But I wouldn't expect any announcements of any more substantial tranches of sales at this point."

May silver rose 1.2 cents at $5.057 an ounce, trading $5.035 to $5.085 with a steadier tone after last week's heavy speculator liquidation ran its course.

Silver hit a 16-month lows at $4.92 an ounce Thursday, hurt by spillover fund selling from gold.

Spot silver was at $5.02/04, up from Friday's $5.00/02 close but below the $5.04 fix Monday.

Nymex July platinum ended up $1.80 at $489.70 an ounce. June palladium fell $13.50 to $582.00 in very illiquid, choppy markets.

Though still on the ropes, June palladium held above Friday's two-month low at $555, hit in the shakeout on news palladium-bull Tiger Management LLC was shutting its hedge funds.

But most analysts believe Tiger had long since exited most or all of his long position, estimated last year at one million ounces -- 13 percent of annual mine supply -- probably during the rally to record highs in February. -Reuters