London gold fixed at $252.90 a troy ounce, 10 cents above Tuesday afternoon's fresh low since May 14, 1979.

``It's still under pressure. Any sign of weakness and the producers are coming in and panic selling,'' said one London dealer.

A further factor encouraging hedging activity was weakness in the Australian dollar, which increases local gold prices to offer producers better returns on forward sales, he said.

Dollar weakness versus the yen had encouraged physical demand in Japan but not enough to lift prices clear of $252.00 support, dealers added.

The yen was last quoted at 118.91 bid versus the dollar, up from the sub-118 levels seen earlier in the week when foreign exchange traders and other markets bought all things Japanese in anticipation of an economic recovery.

Dealers said gold faced no suchexcitement for now amid holiday-hit trade in Europe and gradually declining prices in the run up to Britain's next 25-tonne gold auction in September.

``We feel we are going into the $240s before the next auction, one of the reasons being that the shorts are so far in the money that they can afford to hang in there,'' one said.

Britain sold 25 tonnes of gold on July 6, the first of five auctions through to next March in a programme to cut reserves from 715 tonnes to 300 tonnes in return for increased holdings of dollars, euros and yen.

Spot gold was last at $252.75/$253.25 versus Tuesday's New York close at $253.10/$253.60.

Silver was again testing $5.00 support, which held on Tuesday, trading down three cents at $5.02/$5.05.

Palladium was unmoved by data from Switzerland's Federal Customs Office showing net imports in June at more than 21 tonnes of raw, powder or semi-finished metal.

Platinum was last $2.00 lower at $351.50/$353.50 and palladium was $3.00 down at $333.00/$338.00.

Hong Konggold ends lower

Hong Kong spot gold ended lower in quiet trading on Wednesday after Australian producer selling overcame Japanese buying.

Gold bullion ended at US$252.60/253.10 per ounce on Wednesday compared to New York's previous close at US$253.10/60 on Tuesday.

The price drifted down from a fresh 20-year low set in London at Tuesday's afternoon fix of US$252.80 an ounce amid gloom over central bank and other official gold sales.

``After the open we saw liquidation from Australia in the morning, but Japanese buying helped push gold up. Then there was some more selling from Australia, probably from producers,'' a trader said.

He said the price would probably continue to fall in the short term.

The market was watching developments in the US Congress over a plan by the International Monetary Fund to sell part of its gold reserves to fund debt relief for poor nations.

A congressman said he would propose a plan to avoid selling in the open market. It would involve transferring gold to centralbanks and revaluing it to give it a true market value.

The money would be handed back to the IMF to fund debt relief, said Spencer Bachus, a senior Republican on the House Banking Committee.

``We would have to see which central bank might take gold. If it is China, I think that would be good news for the market,'' a trader said. He noted there were market rumours from time- to- time that China wanted to increase its gold reserves to facilitate the convertibility of its currency.

In Tokyo, gold futures ended sharply lower, and the benchmark June contract touched a record low of 950 yen as the yen strengthened against the dollar and spot gold prices sagged.

The dollar had fallen as low as 118.62 yen but by afternoon the US currency had risen above 119 yen after the Bank of Japan intervened to buy dollars for yen.

Spot silver ended at US$5.03/06 an ounce after closing in New York at US$5.05/08 on Tuesday.

Local tael gold ended HK$7 down at HK$2,338.

The carry- over charge at the Chinese Gold andSilver Exchange Society was -3, unchanged from its previous fix.