Spot gold shed $1.15 from Thursday's close in London and was last quoted at $297.30/$297.80. Bullion dealers said the market remained quiet with prices slipping lower on some selling out of Asia, mainly Japanese futures-related sales. "There was some selling in the Far East which knocked it down a dollar or so and there has been some borrowing in the forwards," one dealer said.

Gold lease rates in the one-month, two-month and six-month rose slightly as a result of the borrowing which put a little pressure on the price. "I am not sure if that is possibly a fresh short or if it is a central bank taking back some stuff, it is too short a period for producer selling," the dealer said. With US markets closed for the Thanksgiving holiday and the market now awaiting the outcome of the UK gold sale, dealers said gold will remain quiet at present levels. "The auction outcome remains very uncertain in the actual market context. Further support before the auction on Monday morning is possible as further short-covering is likely, but we don't see any large potential for a substantial rally," a Swiss dealer said.

Platinum, palladium lower

The Bank of England will sell off 25 tonnes, or around 800,000 ounces, of gold from reserves on Monday as part of a drive to reduce official gold holdings from 715 tonnes to 300 tonnes. Silver remained steady and was last quoted unchanged from the previous London close at $5.19/$5.21.

Platinum slipped lower after this week's attempt to rally higher with lease rates remaining high around the 65 percent level for one-month metal.

Spot platinum was last quoted at $439.00/$444.00 from the London close at $443.00/$448.00. Traders said platinum prices and lease rates are likely to remain at present levels with no sign yet of Russian platinum shipments which has been delayed for much of the year by a legal wrangle.

Russia's State Duma lower parliament may pass a bill opening the door to platinum exports before its mandate expires next month, which would allow metal onto the market in early 2000.

On Thursday the Duma's budget committee completed amendments to a draft law on exports of platinum group metals and will recommend the chamber debate them on Tuesday.

The document, seen by Reuters at the Duma, states that "organisations" rather than "organs" are authorised to export platinum, a technical distinction that has blocked platinum exports all year.