By Alden Bentley NEW YORK, May 18 (Reuters) -- New York gold and silver futures paraded to new highs after London closed on Friday, chased by speculators who flipped stale bearish positions into bets on further gains, dealers said. The active June gold contract turned morning slippage into a stunning 5 percent gain after midday, officially ending up $13.80 at $287.80 an ounce, its highest since Sept. 28, 2000. Spot gold was last at $286.00/70, up from the afternoon fix in London at $273 and Thursday's New York close at $273.30/80. The buying was technical and almost all in futures. Funds came back en masse, paying up aggressively at the close, after pushing gold $8 higher over the previous two sessions. "I haven't seen any stories that would move it, other than the usual one which is there seems to be a lot of buying on the COMEX," said George Parrill, vice president at bullion dealer ScotiaMocatta in Toronto. "If the funds are now reversing shorts and going long, maybe that's a sign the market is going higher in the short term," he said. This week's U.S. interest rate cuts, nascent concern about inflation and tight gold forwards have aligned to turn negative sentiment into a positive outlook for gold, which hit 18-month lows earlier this year and two-decade lows in 1999 amid gloom about central bank disposals. Gold is up nearly 13 percent from a $253.75 spot low in February and the $255.80 June contract low of April. Dealers said the move was reminiscent of the Sept 1999 spike that followed the surprise Washington Accord limiting central bank sales and lending. "We're hearing stories of guys who haven't been seen in the market in two, three and four years calling up and buying gold," said Donald Eckert, global bullion risk manager at J.P. Morgan Chase. Next week, market players will be hoping to gain more insight on the 2001 rally at the London Bullion Market Association conference that starts this weekend in Istanbul, Turkey, with some central bankers expected to attend. The entire gold sector appears to be on a new footing, with the XAU Gold and Silver Mining Equity Index on the Philadelphia Stock Exchange up another 4.12 percent Friday. Many attribute the revival to a smaller spread between gold yields and U.S. paper returns, which narrowed gold contangos and made it less attractive for mining companies and bearishly inclined fund managers to sell gold forward. "One fundamental factor that is helping the gold is low interest rates and I think you've definitely seen a lack of producer selling. Normally you can count on those guys to cap a rally," said another bullion dealer. "It takes a monumental event to get gold moving like this," said the second dealer. "It will prove to be someone had a huge buying interest that started probably back in April. That's my guess." July silver, meanwhile, extended its rally to an 11-week high of $4.625, ending up 8.2 cents at $4.577 an ounce. At one point silver futures were up 30 cents in three days. "It's pretty much all fund buying again," said a silver floor broker. Silver has been following gold futures. It has also been supported by hopes that recent Federal Reserve rate cuts will stimulate demand for jewelry and industrial metals, which silver is considered by many analysts. Spot silver closed at $4.565/585, up from the close at $4.48/50. It fixed Friday at $4.45. NYMEX July platinum rose $1.10 to $616.30 an ounce. Spot platinum was trading $612/617. June palladium slipped 75 cents to $654 an ounce. Spot palladium fetched $644/659. -END- Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
