Silver falls, gold flat as US dollar drops

NEW YORK - Silver fell four per cent as funds continued to liquidate bullish bets that had doubled prices to a record late last month, while gold was steady as uncertainty about indebted euro zone countries offset the positive influence of a weaker US dollar.

Precious metals investors were eagerly awaiting regulatory filings by hedge fund managers and institutional investments due later on Monday in the US, which will show changes in precious metal holdings in their portfolios including during the first quarter.

"Those problems around the euro zone are still there, and they might re-emerge even this week," senior market strategist of MF Global's Lind-Waldock unit Adam Klopfenstein said.

Spot gold eased 0.2 per cent to $US1,490.80 an ounce by 0616 AEST. Bullion had hit a record high of $US1,575.79 on May 2.

US June gold futures settled down $US3 at $US1,490.60 an ounce, after trading from $US1,486 to $US1,504.30.

US futures trading activity was quiet with volume below 130,000 lots, sharply lower than last week's pace and about 40 per cent below its 30-day norm.

Euro zone finance ministers approved a three-year, €78-billion emergency loan program for Portugal and said Lisbon would ask private bondholders to maintain their exposure to its debt.

Losses in bullion were limited as the dollar fell about one per cent against the euro, after the EU meeting showed support for debt-burdened countries, lifting demand for the single-currency after last week's sharp sell-off.

Gold also dragged by a more than $US2 decline in US crude futures, and as US equities ended almost one per cent lower.

Kodak adjusts pricing, cites silver

Silver fell 4.4 per cent to $US33.73 an ounce. The industrial precious metal has crashed about 30 per cent since hitting a record high of $US49.51 on April 28.

A wave of hot money from funds fuelled a rally in which the silver price nearly doubled over four months.

Managed money continued to liquidate positions even after US regulatory data showed big hedge funds and speculators cut their bullish bets in the silver futures market in the week through May 10.

US photography company Eastman Kodak, a top industrial consumer of silver, said it is adjusting its film products pricing policies in response to the "unprecedented rise" in silver prices.

Eastman Kodak said that a majority of the silver contained within its color film and paper products was removed during processing, allowing the company to use a variable pricing strategy.

Silver is a key raw material for Kodak.

"We've seen some very steep curves in commodity pricing recently, including an extraordinary rise in cost of silver," president of Kodak's film, photofinishing and entertainment Group Brad Kruchten said.

In late April, Kodak chief executive officer Antonio Perez told analysts on a conference call that "We are indexing our contracts, we are hedging, and we are moving as fast as we can with the part of the portfolio that is not silver-dependent."

On platinum group metals (PGM), refiner Johnson Matthey said that palladium attracted so much speculative money last year that it would struggle to lure enough new investors to repeat the 2011 rally.

Platinum eased six cents to $US1,755.99 an ounce.

(Source: http://www.businessspectator.com.au/bs.nsf/Article/PRECIOUS-Silver-falls-over-4-pct-gold-flat-as-doll-GWT25?opendocument&src=rss)