Even though the yellow metal has stuck it out in the $255-258 per ounce region, it is significant to note that it is at least $4 per ounce lower than its levels on the eve of July.

Moreover, a Gold Fields Mineral Services (GFMS) report, that gold prices would fall further and trade in the $240-270 per ounce range and average $252 per ounce in the second half of the year, was not what the doctor ordered for the yellow metal. Gold was unable to remain at the top of the current range as lease rates for gold eased from 4.8 per cent to 4.2 per cent, gold slipped from $257.15 per ounceearlier in the week to end at $255.10 per ounce. Marketmen are wary that the yellow metal may test fresh 20-year lows once again after the auction. Further, with the dollar recovering partially against the yen, gold is no longer an attractive buy in yen terms. However, some staunch gold supporting dealers expect the yellow metal to recover after the deadline on any good news about IMF gold sale. There were also reports that the IMF was close to a deal on the sale from its gold reserves.

But there is an interesting development on this front as well. In a published interview, a senior ruling party member and unofficial adviser to the Japanese prime minister said, "why shouldn't Japan buy up gold from IMF by using the excess dollars it owns?" Although there is nothing official about it, should the Japanese Central Bank embark on a regime gold reserves, the entire region hit earlier by the Asian crisis could follow suit. Coupled with Y2K fears, this could be the turning point gold was looking for! Silvercontinued its lacklustre performance of recent times and slipped lower to US cents 509.75 per ounce as compared to US cents 520 per ounce on September 10.

The Central government's notification of the Gold Deposit Scheme (GDS) this week evoked no response from the markets. Everyone now awaits for the Reserve Bank of India (RBI) to announce the details of the scheme.

But the vexed question of assaying and hallmarking has still been left in abeyance and could hamper the success of the scheme. Moreover, it remains to be seen whether the scheme is able to lure rural investors from partaking their jewellery or attracts the urban housewife likewise. Elsewhere, standard gold was virtually static at Rs 4,080 per 10 gms, while .999 silver fell from Rs 8,080 per kg to Rs 7,980 per kg, before closing at Rs 8,010 per kg. Meanwhile, GFMS report has ruled out any recovery of the lost ground by gold during the first half of 1999. It has based its comment on the observation that the bias to the downside stems fromcontinued propensity of those holding gold reserves to supply to the market at an ever-lower price.

According to the report, the May 7 announcement by the Bank of England (BoE) was the `defining moment' for the market this year. In spite of lower prices, mine production increased by one per cent while fabrication demand declined by 3.2 per cent, weighed down by the 5.8 per cent fall in jewellery offtake. It is most pertinent to note that despite low prices, jewellery fabrication declined by 67 tonne from the Indian sub-continent in the current. No wonder the numerous gimmicks and the gold jackpots!