New York gold futures reversed gains to end near last week's low in thin trade on Tuesday, with traders wary of volatility in the final sessions of 2005 but clinging to a bullish view for next year.
Silver fell even more sharply as liquidity dried up before the holidays. "There's no reason for long-term investors to get out. Short-term guys are probably just waiting 'til the holiday lull is over," said a Decker at a bullion-trading firm. "The major players are going to try to bully this thing around, but you would imagine volumes are thin."
At the Comex division of the New York Mercantile Exchange, gold for February delivery fell $9.10 to settle at $497.00 an ounce. It hit $496.50, near last week's $496.20 low, from $511.40 in ACCESS screen trade overnight. Gold started higher, still enjoying the bargain hunting by investors and physical consumers which emerged on Monday after last week's shakeout from a 25-year peak at $544.50 an ounce a week.
The market is optimistic about sustained diversification into commodities. Japanese investors have recently bought gold for yen and there has been interest reported in the Middle East to convert dollars from crude oil profits into gold.
But, with trading books being closed for the year, players are loath to risk the year's profits to illiquid markets, where price swings can be dramatic.
Spot gold traded late at $492.90/3.70, down from New York's previous close at $503.30/504.10 an ounce. On Tuesday's afternoon fix in London was at $502.50. March silver futures tumbled 25 cents to $8.395 an ounce, trading from $8.71 to $8.35.
Last week, prices were above $9 per ounce, at their highest levels since 1987. Spot silver fell to $8.29/32 from $8.55/58 an ounce late on Monday. On Tuesday's fix was at $8.55. In Nymex futures, January platinum went down $16 to$961 an ounce.
Platinum futures hit a near 26-year high at $1,026 last on Monday. Spot platinum was quoted at $955/960, down from $972/976. "At $955 it looks good. It's just end of year," said a dealer at a precious metal refining company. "From everything I read, there is just going to be more money flying into these things than you can shake a stick at. So it's probably bullish."
March palladium eased $2.70 to settle at $254.40. Spot fell to $254/258 from $260/264.