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London gold fixes lower as silver price corrects

LONDON: Silver led the way southward after Comex opened lower as forecast but found support to steady the complex at slightly lower levels, dealers said.

Bullion fixed at $382.75 per ounce after $383.45 this morning and $384.05 on Tuesday afternoon.

At the fixing, Comex December was off about $0.30 at $387.80, up $0.60 from the one-week low hit early.

But gold remained very much the second of the two markets with light business simply adjusting values to the silver price.

Analysts said there was adequate support under the price at $382.50 which held when reached this afternoon.

After that there was $381.50 and the May 22 low of $380.40.

"There is very good support beneath the market and we should bounce from there," one dealer said.

However gold's upside potential would be limited until fears abated of the consequences of producer selling at anything over $385, dealers said.

Silver was still assumed to be targeted on $6.00 but around the gold fixing it was trading near $5.60, around 10 cents below its previous London close having come off $5.55.

Some dealers thought a move to around $5.40 was charted if stops were hit when prices dropped to $5.55.

On the upside, $5.80/$5.85 still presented a formidable barrier, dealers said.

The squeeze was still in place and metal remained tight. But the focus had shifted to New York and speculation that warehouse stocks, standing at their lowest for 6 1/2 years, may not be sufficient to cover the open interest on the September contract.

"It is still too early to get worried," brokers GNI said.

Meanwhile a background of steady interest rates near-term will help keep investor participation thin in the sector.

The dollar was fairly steady at 1.4800 marks and 96.32 yen. having began to consolidate after looking overbought.

Platinum and palladium opened lower in Europe with silver and were struggling to hold opening levels most of the day.

There was no obvious impact on platinum prices from the strike by production workers at Impala's Springs refinery where management said output would not be affected.

Early spread trading against gold took platinum higher intitially but selling accompanying the lower Comex silver opening took prices, lower. By 1435 GMT platinum was indicated at $425.25/$426.25, down $4.50.

Palladium was steady and quiet at $149/$150. down $2.00.-Reuter