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REUTERS
LONDON, SEPT 29: Silver's overnight rally stalled on Tuesday in Europe, dulling gold's rise but leaving upside potential in place for both metals, dealers said. Silver's climb, which began in New York on Monday, initially continued in Europe only to falter at key resistance around $5.37 an ounce.
"Silver forwards have really been on the move since yesterday and spot silver has drawn some benefit from that," said one London dealer, who put the higher borrowing rates down to speculator interest. "It's probably a bit of speculation about a turn-up in the market," she said, pointing to Indian seasonal demand for jewellery-making as one factor.
Silver was last at $5.34/$5.36, versus New York's Monday close of $5.29/$5.32.
Overnight dollar weakness against the yen encouraged gold to test $297.00 resistance several times after US treasury secretary Robert Rubin expressed concern about the weak Japanese currency.
Dollar moves also anticipated Tuesday's meeting of US Federal Reserve policy makers, which wasexpected to cut official interest rates to shield the US Economy from financial turmoil elsewhere.
Analysts predicted a cut in the federal funds rate by at least a quarter of a percentage point from 5.5per cent.
Gold opened in Europe around $296.65 before busily trading either side of that level ahead of the Federal Reserve meeting.
Trade on the London fix pushed spot prices half a dollar higher, with the morning fix at $296.85, against the previous afternoon's $292.25.
Spot gold was last at $296.90/$297.40, up on New York's Monday close at $295.70/$296.20.
Gold lease rates eased again from Friday's recent peak, with London Bullion Market Association rates for one-month metal falling to 1.31 per cent from Friday's 1.70 per cent.
Rates had jumped from Thursday's 0.65 per cent on fears of wider liquidity problems related to the difficulties of Long-Term Capital Management, the US hedge fund.
Platinum group metals were again soft on Tuesday, falling just before the start of European business onproducer selling, a dealer said.
Platinum was last at $348.00/$350.00, down $3.00 on New York's close, while palladium was at $280.00/$285.00, down $8.50.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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