Daily Gold Update

Source: CBS.Marketwatch

Washington— The pullback in metals prices continued Monday, with silver alone bucking the bearish trend to start.

Analysts were negative on prospects for the sector staging an effective turnaround.

"The complex is approaching oversold levels, but given the prevailing negative mood, rallies will probably be seen as selling opportunities," said Man Financial in a research note.

Gold trended lower, as the June contract slipped $1.60 by late morning to $419.10 an ounce on the New York Mercantile Exchange.

The precious metal got no lift from a modestly weaker U.S. dollar, which played off Treasury Department data showing a slowdown in foreign capital inflows for March.

That the dollar didn't really sell off on the inflows data "will not bode well for gold," said James Moore of TheBullionDesk.com.

Moore sees a bleak short-term outlook for gold, pegging support at $418 and then $415 an ounce. If these are breached, gold will likely retest the year's low at the $410 level, he said.

Metals futures had retreated across the board on Friday, paced by plunging copper.

July copper gave more ground to start the week, skidding 1.05 cents to $1.342 a pound.

Meanwhile, July platinum fell $16.90 to $848.50 an ounce, while June palladium lost $2.25 to stand at $187 an ounce.

Earlier, Johnson Matthey said prices for platinum are likely to hold firm this year in light of marginal increases anticipated in both global supplies and demand.

The forecast calls for further increases in demand for the metal for use in industrial applications and by automotive manufacturers, following on the pattern seen in 2004.

Johnson Matthey foresees platinum trading in a range of $830 to $930 an ounce over the next six months, after rising by 5.6% in dollar terms over 2004 due largely to the greenback's depreciation against the other major global currencies. Platinum's price averaged $864 an ounce during the first quarter of 2005.

Also on Nymex, silver managed a gain of 2 cents to $6.96 an ounce.

According to the latest inventories data as tracked by Nymex, gold stood at nearly 6.13 million troy ounces as of the close of business on Friday, up 49,521 troy ounces from the previous day. Continuing its recent trend, copper fell 66 short tons to 27,509 short tons, while silver inventories were unchanged at 105.61 million troy ounces.

In equities, the indexes tracking mining stocks stabilized but remained to the downside.