Daily Gold Update

Source: Reuters

New York— Gold and silver ended mixed in sideways trade as the dollar sought direction on Monday, while palladium backed off as the big buyers from last week waited for cheaper levels.

NYMEX June palladium closed off 25 cents at $209.80 an ounce, trading in a $213.80-$206.00 range after Friday's $10.20 closing gain. Estimated volume was 660 contracts, compared with Friday's official 3,227.

Spot palladium was quoted late in New York at $202.50/207.50.

"Some of the customers did in fact pay up for this palladium on the close," said Ralph D'Esposito at RJ Futures, adding that a pullback to $200 or $203 could be helpful before palladium heads up to $230.

"You might have to shake out a little bit just to build something below you," he said.

The benchmark contract reached $219 Friday morning, its highest price since Nov. 30, 2004, as speculators bet that it was due to catch up to rallies in other metals.

Thursday's decision by Russia's government to declassify palladium stock and reserve levels was a catalyst for the 14-percent gain on the week.

"With the knee-jerk reaction to Russia's data declassification starting to subside, palladium is likely to settle around $200-10 for now but is still open to pressure due to the heavily oversupplied fundamentals," wrote James Moore at TheBullionDesk.com.

Russia long controlled the global supply of palladium, a platinum group metal used in automobile catalytic converters. But Russia's stockpile has always been a state secret.

South Africa has raised its production of palladium significantly in recent years. The country is the most important producer of platinum, which can be substituted for palladium in most gasoline engines and is popular as jewelry.

April platinum was down $2.50 at $868 an ounce. Spot platinum was last at $862.50/867.50.

Funds have been shifting out of the dollar and buying hard assets as U.S. stocks and bonds struggle. Commodities, especially metals, have benefited from the rotation away from paper assets, which started last year.

"Most of the attention has actually been on palladium," said a New York trader. "There is a little bit of profit-taking going on in palladium and very good two-way volume. There's speculative interest on the buy side and still seems to be a little bit of producer selling into this."

COMEX gold for April delivery ended up 70 cents at $435.80, holding in a narrow $433.30 to $436.60 trading range. An estimated 36,000 contracts changed hands, compared with 51,302 tallied on Friday.

Spot gold was quoted at $434.40/5.20, up from Friday's close at $433.60/4.40. London's late fix was $433.00.

May silver rose 1 cent to $7.395 an ounce, trading from $7.465 to $7.34. Spot silver fetched $7.33/36, up from $7.32/35. It fixed at $7.35.