LONDON, Aug 20: Gold and silver were glued within recent price bands on Wednesday morning, as platinum and palladium extended their downtrends.Gold was hemmed in by good physical offtake on the downside and persistent selling on any move higher, dealers said.

Bullion fixed at $322.00 per ounce, down $1.45 from Tuesday afternoon but little changed from the previous morning's level. The market has held between $320 and $329 since August 8.

"We're seeing very good physical buying at $321 and $322 from the Middle East and the Far East," a dealer in London said.

Reports from Asia said Indian offtake was particularly robust and refineries in the Middle East were working overtime to meet the demand.

The feeling that central banks were in the market again has been spurred by strong gains in nearby lease rates. The one-month implied rate on Wednesday was unchanged at 2.44 per cent.

A strong rebound by Wall Street on Tuesday failed to faze the market, but the expected decision of the Fed to leave US interest rates unchanged may have a delayed impact.

Speculators, which have been reported to be establishing fresh short positions, may exploit the opportunity, a dealer said.

Silver was also locked in a narrow price band after failing to break above $4.60 resistance last Friday and Monday. So far on Wednesday prices had oscillated between $4.50 and $4.53, basis bids, little changed from Tuesday.

Platinum and palladium, however, saw more erosion on renewed reports of Russian selling. Platinum was quoted at $405.50-408.50 per ounce, down $3.50 from Tuesday's close.

In Tokyo, platinum fell sharply and some futures contracts hit their daily limits as private investors built up short positions, Japanese traders said.But the downtrends may be bottoming out, with many players doubting that Russia will continue to sell palladium below $200.

Palladium was $3.00 lower at $195.00-198.00 per ounce.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.