It was fixed at $336.55 per ounce down from $337.30 at the morning fix to record its lowest level since April 1, 1993 of $336.35. On Comex, the August gold futures contract was down $1.90 at $337.90.
Gold was under pressure early when selling from the market professionals made a test of the year's low, and the lowest traded price in over four years at $336.15 was likely.
The price had bounced slightly Thursday evening but dealers said this merely reflected the professionals covering their positions taken in anticipation of further losses, when unexpectedly the price stablilised at around $337.00.
``There has been good support at $337.00 from buyers of physical metal but if that goes we could see a test of the low quite quickly,'' one dealer said.
Shortly after the gold fixing, the market had slipped another few cents and bids and offers ranged round the low.
Many dealers and market analysts forecast a rise next for gold if only because all the auguries suggested otherwise.
``When a market looks as bad as this it is a sure sign the price is at the bottom,'' one dealer said.
He said the many speculative positions taken out as bets that the price would fall further would need to be covered if the market failed to fulfil these expectations.
``That could be enough to turn it round although it may not set it on fire,'' the dealer said.
One analyst took the broader view that something exceptional was needed to lift the price given inflation was under control in the major economies and there was little chance of a financial crisis reactivating gold's safe haven status.
``The outside parameters have to change to stimulate fresh buying,'' the analyst said referring to the financial calm in which gold prices were suffering.
Another analyst tok the view that relatively drastic action by the gold producers would be needed to re-stimulate buying.
``Shutting down a few high cost mine shafts in South Africa might make a difference,'' he suggested.
Meanwhile the silver price shed only a few cents to $4.73/$4.75, platinum was unchanged at $417.00/$422.00 and palladium was down $3.75 at $192.25/$197.25.
11:03 06-27-97
Keep up the great dialogue....it's mind bending.
Dave
Interesting that the rise in the $US negated the $US Gold fall in most other currencies. Also interesting - as Steve Kaplan points out - that open interest is rising as Commercials buy all the Gold they can get their hands on.
I personally am awaiting the FOMC meeting with great interest. Canada just raised rates 0.25% and Italy just lowered them 0.50%.
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