Skip navigation
Newswire

COMEX gold prices consolidate gains in tight range

NEW YORK, Sept 24 (Reuters) - COMEX gold prices teetered either side of unchanged as they continued to consolidate their recent gains, but with fewer players willing to take the risk at the higher levels, the trading band narrowed on Wednesday, gold traders said.

"There's nothing happening. It's very, very slow. I think we're consolidating after the move from the reaction to the G7 statement," said one COMEX floor broker.

COMEX December gold futures were even at $387.00 an ounce, in a tight range between $384.80 to $387.80.

COMEX estimated 0900 EDT gold volume at 5,000 lots.

Further weakness in the dollar offered miner support to gold prices on Wednesday, traders said. The decline in dollar/yen fell short of the three-year low set on Tuesday.

The weekend communique on currencies released by finance officials from G7 nations was interpreted by market participants as a policy to soften the dollar, especially against currencies of Asian countries with whom the U.S. is running huge current account deficits.

Gold achieved a seven-month high on Monday as currency traders tested the resolve of central bankers to see how far they would let the dollar deteriorate.

On Wednesday, the dollar's declines were tempered when Japan's new finance minister warned against the yen's recent surge. And gold traders tempered their purchases as well.

Dollar-denominated gold gains in value in overseas markets when the U.S. currency weakens.

Additionally, net long gold positions have been at historically heavy levels causing greater caution on each approach of key resistance levels.

Some speculators have grabbed profits in the current range, and some have attempted to ferret out stop-loss sell orders, but support levels have been aggressively protected all week.

Traders said they pegged first support at Tuesday's low of $384.30 and then at Monday's low of $384.00. A break of that would send gold back to its lower trading region with a stop-loss sell orders thought to lie at $383.40.

Resistance for December gold at Monday's seven-month high of $389.10 was on everyone's mind, in anticipation of a next goal at the $391 seven-year high.

"If we break major resistance at $389 we'll see $400. The view to see $400 before December is growing," a trader said.

Spot gold bullion was quoted at $384.85/5.55 an ounce, softer than $385.40/6.15 late Tuesday. London dealers fixed the morning reference price at $385.00.

December COMEX silver rose 0.50 cent to $5.25 an ounce, in a $5.225 to $5.275 range. Spot silver was even at $5.20/5.22 with Tuesday. Silver was fixed at $5.22550.

NYMEX October platinum lost $1.90 to $704.00 an ounce. Spot platinum was last at $703.00/708.00.

December palladium eased $1.00 to $217.00 an ounce. Spot palladium was quoted higher at $214/221 an ounce.