Daily Gold Update

New York— New York gold stayed steady at higher levels, reacting to the slipping dollar and, to a lesser degree, U.S. inflation figures, and brokers said they expect it will hang at moderately higher levels for the day.

The result means that investors are not turning to gold as an inflation hedge just yet. Instead, gold traders relished the drop in the dollar for its implications in allowing European buyers to purchase the yellow metal more cheaply.

.The CPI was overlooked by the gold market. They were watching the potential strike in South Africa with half an eye, but they are looking at currencies straight on,. said one COMEX floor broker.

The euro leaped to three-week highs against the dollar on Wednesday. Dealers said the fragile outlook for U.S. stocks along with concerns that a strong dollar may be hurting the global economy were weighing on the U.S. currency.

They said this was especially so ahead of Federal Reserve Chairman Greenspan.s semi-annual testimony to Congress.

In South Africa, the National Union of Mineworkers said Wednesday that a dispute over wages had prompted its 155,000 members to opt for striking on July 26 at the country.s gold and coal mines.

New York gold traders were keeping an eye on that, but one trader said it would probably not have a large impact unless the strike became prolonged.

August gold gained 60 cents to $269.20 an ounce and held steady. Its early range spanned $268.20-$269.50. Wednesday.s early estimated turns were 9,000 lots.

An early quote put spot gold at $268.80/8.60, up from the New York close at $268.10/8.60 on Tuesday. The early gold fix in London came in at $268.10, up 50 cents.

PGMs plummet
Meanwhile, platinum group metals crashed to new contract lows right from the start, following London.s lead.

Palladium tumbled for the second day in a row to lows not visited since February 2000. Platinum was right alongside it as it crashed to its lowest levels since May 2000.

PGMs followed London prices as talk of renewed shipments from Russia, a major exporter and producer, continued to circulate . London traders said overnight selling in Japan also spilled over to European trading.

Despite massive declines in PGMs so far this week, traders noted that all of it has been on slim volume, and could therefore mean the drop is far from finished.

NYMEX September palladium gapped lower for a second day in a row, falling $13.00 to $512 an ounce, to establish an early range of $506 to $521.

NYMEX October platinum futures lost considerable ground, falling $24 to $516 an ounce. The morning range ran from $515.50 to $540.50.

Spot palladium was quoted with a wide spread of $512/512, down $10 from Tuesday.s closing level. Spot platinum prices were pegged at $518/523, a significant decline from Tuesday.s close at $543/548.

September silver fell 3.8 cents to $4.21 an ounce, trading in an early range of $4.195 to $4.26.

COMEX put early silver volume at 1,500 contracts.

Spot silver was quoted at $4.25/27 cents an ounce, up from the $4.24/26 prior close. Silver was fixed in London at $4.24, up $2.00 from the previous fix.

Traders are watching the $4.20 to $4.25 range for silver. A move above that could lead to $4.28 to $4.32 on top, while a breakdown points to $4.18 or $4.12. Those lows have not been seen since October 1993.