REUTERLONDON, May 22: The tone in the precious metals markets was generally easier on Thursday as the platinum group (PGMs) weakened further from Wednesday's closing levels.

Dealers said news that Russia would begin platinum and palladium exports at the end May or the beginning of June and that tonnages would match 1996, had taken the heat out of PGM prices.

Selling of PGMs was particularly prominent from Switzerland early on Thursday, one dealer said.

Gold was fixed at $342.95 per ounce, barely changed from Wednesday's $342.70, but dealers said the tendency would probably by southwards ahead of the long weekend in the UK.

"There was short covering in gold earlier but selling came in. It looks like heading to the lower end of the range," one dealer said.

Gold has spent the week between approximately $340.00 and $343.00, with the range narrowing towards the top end as the week has progressed.

Moves have largely reflected changes in dollar-yen parity with the weaker dollar mainly supportive. However, the easier tone in the PGMs was likely to weaken gold before the end of the week, dealers said.

Technically, $340.00 has been tested twice recently and should hold, while further support will be available at $338.00, the April 16 low.

The PGMs were also forecast to drift lower given statements from Almaz officials on long-delayed 1997 exports.

Even so, the markets remained very tight and one-month lease rates were quoted at 13 per cent and 25 per cent for platinum and palladium respectively.

The Nymex June palladium contract had open interest of 5,007 lots on May 20 and the notice period for the contract begins next week.

Some dealers said this presented a potential squeeze as shorts came to cover. Warehouse stocks are a fraction of the amount needed to cover the shorts' open positions, they added.

Others were less convinced. "This has been going on for so long, its pretty well flagged," one dealer said, adding that nevertheless some people could get hurt.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.