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Gold holds steady, silver weak

Our Bureau

MUMBAI, Nov. 26

GOLD tested but failed to break resistance around $268 per ounce several times last week and ended the week little changed at $265.55/oz, London PM Fix. Late in the week, the activity was dampened due to holiday in the US.

Traders are hoping for more action next week following strong gains in the US gold equities (up over 10 per cent over the past two days); the return of the US gold market and rolling over of monthly positions; plus the existence of a large net short posi tion held by large speculators on Comex (131 tons on November 14, the largest since September 14, 1999), according to Macquarie Bank Ltd.

There is belief that selling pressure, particularly through central banks, may have eased for the time being. Many central banks are reportedly concerned about the current value of the yellow metal and are talking about ways and means of restoring the va lue.

Quoting trade reports, analysts said jewellery sales were expected to be high this festive season. High-end merchandise is expected to fare particularly well, with jewellers at both ends of the industry predicting double-digit sales increases.

Silver was weaker again last week and closed at $4.62/oz, its lowest level since September 1997; but it is still holding support at $4.60/oz. Silver was hit with the worst of movements in gold or base metals, an analyst said.

Platinum weakened last week on profit-taking and some easing in industrial demand, while palladium remained steady. The former closed the week at $586/oz and the latter ruled at $783/oz.