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London gold fixes slightly firmer with Comex

LONDON: Bullion prices remained steady on Thursday afternoon, showing virtually no response to the Bundesbank's 0.5 percentage point cut in Germany's Lombard and discount rates.

The foreign exchange markets' reaction to the cut was momentary and featured a brief half-pfennig rise by the dollar.

Sentiment was not improved by weaker-than-forecast U.S. July durable goods orders which showed a 0.7-percent fall versus forecasts of a 0.8-percent rise.

Silver continued to hold centre stage in the sector, although dealers said business was quiet there too.

Gold was fixed at $384.00 per ounce after $383.10 this morning and $382.75 on Wednesday afternoon.

The Comex was firmer in light early business with the December contract $0.7 ahead at $389.10 at the fixing.

"There is not a lot going on. Silver has been more active recently, but that's also quiet today," one dealer said.

Others said the downside guarded by support at $382 then $381.50 and $380.40 had been well tested and most interest was in the upside.

But assuming $382 did hold, no rally to test the $385 barrier was forecast until next week, dealers said.

"It is unlikely to show any major moves for the remainder of this week," one dealer said.

Even then the perceived threat of producer selling at over $385 made the buyers wary. However the charts suggested a break over $385 could take gold to re-challenge $388-$389.

Silver was also firmer on Comex in early business which held spot levels around $5.70, about 10 cents up on the previous close which reflected the market's two-day correction.

"We were encouraged this morning by a positive close in New York last night," a dealer said.

That in turn came from physical tightness.

A fall of 25 million ounces in Comex warehouse stocks since late last week had reduced inventories below the September open interest leaving dealers nervous and anxious to stay long.

Platinum responded to silver's firmness to reach $433.25/$434.25, around $7.50 above the Wednesday close.

"The market was a bit short and the dealers have had to cover," a dealer said, adding that there might have been a little covering against possible future supply disruptions at Impala's struck Springs refinery.

Palladium was up $1.00 at $150.00/$151.00.-Reuter