May 23, 2006	Tuesday	Rabi-us-Sani 24, 1427

NEW YORK, May 22: Gold futures in New York recovered slightly, after sliding to a four-week low, on Monday as bargain hunting at cheaper levels lent support to prices damaged by fierce selling in recent days, dealers said.

Platinum and palladium stayed weighed down by speculative selling at midmorning, though silver trimmed losses after dropping to a one-month low.

Precious metals have come under pressure from a strengthening US dollar, which prompted some investors to switch out of hard assets in favour of holding cash following a recent searing commodities-wide rally.

You have continued liquidation and profit-taking, said George Gero, vice president at RBC Capital Markets Global Futures, who added that a fall in gold below $650 triggered a new round of stop-loss sales on Monday.

There are a whole host of people who have huge profits, because a lot of people bought it all the way up from $400, $500, $600, Gero said.

By 10:13 a.m. EDT, gold for June delivery was down $6 at $651.50 an ounce at the New York Mercantile Exchange’s COMEX division, trading in a range of $661.50 to $636.80, its weakest price since April 28.

As gold consolidates, it could fall further, to perhaps $625 or so, dealers said, though a bounce back up to $675 also could not be ruled out due to increased global tensions, high energy prices and volatility in global markets such as currencies.

Gold futures hit a quarter-century peak at $732 an ounce on May 12, before diving to new lows on Monday as funds exited long positions across the metals group.

The net fund position in COMEX gold futures fell to 126,157 contracts as of May 16, down 6 per cent, or 7,779 contracts, from May 9, Commitments of Traders data from the Commodity Futures Trading Commission showed.

Spot gold slid to $652.60/653.40 an ounce, from Friday’s New York close at $659.20/660.00. Monday’s afternoon bullion fix in London was at $652.50.

COMEX July silver rose 10 cents to $12.46 an ounce, trading between a near-one-month low of $11.88 and $13.16.

Silver hit a 25-year high of $15.20 an ounce on May 11.—Reuters