LITTLE REACTION TO COMEX PRICE LIMIT REMOVAL
The elimination of price limits on
precious metals contracts trading at the Commodity Exchange in
New York appears to be having little effect on the market,
analysts said.
    "There is nothing apparent from the change," said William
O'Neill, director of futures research at Elders Futures Inc.
"The market has not approached the old price limits and trading
is relative quiet, in narrow ranges," he added.
    Gold futures, which previously had a limit of 25 dlrs on
market moves in most back months, were about 7.00 dlrs weaker
in the nearby contracts amid thin conditions, traders said.
    On May 5, COMEX did away with price limits on the two
contracts following spot after a volatile market in silver
futures at the end of April caused severe disruptions.
    During the last week of April, silver futures traded up and
down the price limit in the back months, causing traders to
rush into the spot contract to offset those moves, analysts
said.  As a result, Elders' O'Neill said, there was much
confusion, many unmatched trades, and large losses.
    The COMEX fined Elders Futures and three other large firms
a total of 100,000 dlrs for failure to resolve unmatched trades
in a timely manner.
    Silver futures were trading about 30-40 cts weaker in the
nearby contracts amid quiet trading today.
    O'Neill said the elimination of price limits on all COMEX
metals futures would add caution to trading since all contracts
could move any distance.
    "This is amore realistic approach because the metals market
is a 24 hours market and prices can move without limit,"
O'Neill said.
    Paul Cain, a vice president at Shearson Lehman Brothers,
said the elimination of price limits will cut back on panic
buying or selling  and contribute to more orderly markets.
   
 Reuter
