The Hindu Business Line : Gold firmness may continue

Starting the week on a strong note, gold was volatile mid-week on profit taking ahead of US Federal Reserve decision on interest rates. The market was struggling for direction with volatility seen across the financial markets. Fund buying returned strongly late on Thursday, but softened modestly back on Friday. Official Friday price was $364.50 an ounce (London PM fix), up 3 per cent week-on-week from $353.95/oz.

The latest Comex commitment of traders report showed that long liquidation had seen a reduction in the net long position in gold, down by 54.9 tonnes to 179.8 tonnes as at August 5.

``Given that the New York market only traded for two hours, volume was thin and hence was probably little guide to real market sentiment. Overall, there does appear to be some upward momentum in gold at present and a test of resistance at $370/oz seems likely'', commented Mr Kamal Naqvi, analyst with Macquarie Research Equities.

Silver had a volatile week with prices bouncing between $4.85/oz and $5.05/oz with long liquidation clearly in evidence above $5/oz. Prices were struggling to hold above $5/0z, but kept bouncing back assisted by the strength in gold. Official price on Friday was $5.02/oz (London AM fix), down from $5.05/oz of previous Friday.

Platinum enjoyed a good week with buying interest returning and sending prices back up towards resistance at $700/oz and closed at $697/oz (London PM fix), gaining 2.5 per cent. Palladium was also modestly stronger and ended the week at $176/oz ($175/oz).

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