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Three-week low for gold, platinum nine weeks

LONDON: Gold bullion matched losses in platinum and silver on Thursday afternoon, with the metal fixed at $279.40/ounce, the lowest since December 14.

Earlier on Thursday platinum was fixed at a nine-week low of $414.00 an ounce, while silver was set at three-week lows of 514 cents an ounce.

"As far as gold is concerned, there is nothing really fundamental behind it. And it is still pretty quiet," one trader said. Unusually for the precious metals sector, worries over official sales in platinum and silver were paramount. That factor was normally associated with gold, Mitsui Global Precious Metals analyst Andy Smith said.

Platinum's losses from overnight closing levels of $421.00/$426.00 reflected news Russia had cleared the way to resume exports of the metal.

Earlier on Thursday, an amendment to a Russian law that had blocked exports of platinum group metals (PGMs) except palladium in 1999 became effective when it was published in the official Rossiiskaya Gazeta.

"The market has every reason to be cynical about Russian statements, but there is more evidence now that this is for real," Smith said.

The amendment, signed by acting President Vladimir Putin on January 2, authorises "wholly state-owned enterprises to carry out exports according to an order established by Russian legislation."

A trader said, "There are a lot of tired longs in platinum now and with gold and silver jittery they are selling out...It could go to $400/$402."

Russia's PGM holders must now obtain quotas for exports in 2000. Before 1999 Russia accounted for around 20 percent of world platinum supplies.

Silver continued to decline, responding to Wednesday's news China's central bank could start selling reserves.

The People's Bank of China is likely to reduce its silver holdings by selling on the international market, the China Mining News reported.

China's silver production in the 1990s outpaced demand and the surplus in the five years between 1994 and 1998 was nearly 2,900 tonnes, the official industry publication said in its Tuesday edition.

It estimated current Chinese silver production at 1,300 tonnes a year and demand at 800 tonnes.

Spot silver inched off the lows to quote at $5.15/$5.18 an ounce, down just one cent from Wednesday.

Gold business was restricted to a narrow range, with underlying physical demand around $280.00 keeping price falls to a minumum. Below $278.00, however, the market would be vulnerable to sell-stops, with chart targets around $275.00.

Spot gold was quoted at $279.40/$280.40, down from the previous $280/75/$281.25.

Palladium was helped by industry interest, which kept falls small-scale. It was quoted at $430.50/$435.50, against $435.00/$440.00.

"There is good industrial demand end-users are building some stocks," the second trader said.-Reuters