The Hindu Business Line : War reports drive gold market

CONSTANT flow of reports relating to war in Iraq impacted all the markets including financial market last week. Gold was no exception as war theme was the dominant driver.

Early in the week, as it appeared, the military action would drag on for a longer time than earlier anticipated, gold firmed up even as the dollar and equity markets weakened.

However, later in the week, when prospects for an early end to war became clear, prices not only retreated towards $330 an ounce but also tested towards $322/oz.

Official Friday price was $323.80/oz (London PM fix), down 2.1 per cent week-on-week.

The net long position in gold rose 25.2 tonnes to 91.9 tonnes as on March 25, according to the Comex commitment of traders report. This, however, was more due to short covering than long liquidation.

Silver eased lower last week, having softened from a week-high of $4.47/oz on Monday. Gold continued to be the key driver. Friday official price was $4.39/oz (London AM fix).

Long liquidation continued in the platinum group of metals, particularly out of Japan.

This is taking a toll on both platinum which lost another $15 to end the week at $615/oz (down 2.4 per cent) and palladium which lost 10 per cent in sympathy to close at $171/oz.

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