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Bullion trade slows, palladium off highs

LONDON: Business in European precious metals slowed on Monday afternoon, with U.S. markets closed due to the Presidents' Day holiday,

Gold was hardly moving, and although pace-setting palladium shed $15 from its morning all-time high fix the market remained strong, amid renewed scepticism over Russia's ability to resume metal exports, traders said.

"The U.S. is closed today, so there is no real activity in the market-place this afternoon. All the action took place this morning," one trader said.

Spot palladium was fixed at $785.00 an ounce, $15 below its morning record of $800.00, but still 17 percent above Friday afternoon's fix.

"There is plenty of buying around...and it is evident that the buying is short covering," analyst Ross Norman of Precious Metals Research said.

Europe's stunning early gains followed hot on the heels of Asia, where TOCOM futures were limit-up on Monday. The price had tumbled on Friday to $670 after Russian Finance Minister Mikhail Kasyanov said the country would sort out export problems swiftly and bring them back to normal.

But Russia is a notoriously erratic supplier. The country accounts for two-thirds of the world's palladium supply, and has failed to deliver the metal in the first six months of each year since 1997 due to bureaucratic red tape.

"There is no reason for it (the price) not to firm further unless Russia delivers metal in the next few days," Norman added.

Platinum was steadier, with the metal fixed at $523.00 an ounce on Monday afternoon, up from Friday's afternoon fix of $512.00, but below the 12-year high fix of $573 set last Thursday.

Gold bullion prices remained steadier this afternoon, but there was minimal movement with the market content to cling to the $305.00 level.

As well as the U.S. holiday, many participants are also attending a major industry conference in Dubai this week.

"It has been quiet -- there is a bit of buying around, but it is still stuck in the $300/$310 range. If anything, it might edge up towards the top end," a gold trader said.

Spot gold was quoted at $305.00/$306.00 an ounce, up from a New York close of $303.80/$305.80.

Silver was slack, and drifted back slightly to settle at $5.21/$5.24, against the $5.23/$5.25 New York close.-Reuters