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Asian silver extends losses, trend seen down

HONG KONG: Asian spot silver extended losses on Thursday on worry about possible official Chinese sales, and gold fell after late selling from Europe.

Spot silver, which fell to a three-week low, was quoted at US$5.13/16 an ounce after closing in New York at US$5.16/19 on Wednesday.

Gold bullion was quoted at US$280.60/281.10 per ounce late on Thursday compared to New York's previous close at US$280.75/281.25 on Wednesday.

Further declines in silver were possible after a steep drop overnight which was prompted by a news report about possible sales by the People's Bank of China, traders said.

"We saw some short-covering, but silver is still under pressure and could test lower," one dealer said.

The China Mining News said on Wednesday China's central bank was likely to reduce its silver holdings by selling some on the international market.

Spot silver was trading at its lowest since December 14 when the low bid was $5.10.

In Tokyo silver futures closed lower, but traders said the yen's retreat against the dollar limited further losses.

Gold futures ended higher after spot bullion prices maintained a firm tone for most of the day.

Spot gold rose after buying for physical demand and Japanese buying, but the gains were erased late in the day after European selling.

Local tael gold was quoted HK$15 down at HK$2,606.

The carry over charge at the Chinese Gold and Silver Exchange Society was -3, unchanged from its previous fix.-Reuters