Precious metals prices decline further in New York

New York (Platts)--7Sep2006

The downslide in precious metals continues on the New York futures
exchanges Thursday morning, with selling pressure emerging in all of the
metals. Trading has been particularly heavy in gold, which apparently is
leading the precious metals complex on its downward path.

At 9:55 a.m., the nearby December gold futures contract on the COMEX was
trading at $630/oz, down $11.80 from Wednesday's settlement, and December
silver was trading at $12.95/oz, down 25 cents. On the NYMEX, the nearby
October platinum contract plunged $12 to $1,263/oz when it last traded at
9:41 a.m. and December palladium fell $5.55 to $354/oz.

The dollar remains firm at yen 116.38 and $1.2729/euro. But analysts
believe the greenback has been exerting very little pressure on precious
metals during the current blowout.

"It's profit taking in gold," said one trade source. "The hedge funds use
the rally [on Tuesday] to lighten up on their existing longs. It gave them the
opportunity to get out of some of their weaker longs."

Profit taking in silver is due mainly to the court settlement of the
recent Presidential elections in Mexico, making any protracted period of
unrest unlikely.

The PGMs benefited from the raging fires in Montana that shuttered
Stillwater's PGM mines last week, with both platinum and palladium rallying.
Now it's time to take profits, so these two metals are unwinding also,
according to trade sources.

--Ovid Abrams, ovid_abrams@platts.com

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