Traders say a calm hangs over the gold market as speculators around the world wait for direction from the powerful U.S. commodity and stock exchanges, which will reopen for business in New York on Monday.

"There really is no substantial gold trading going on," said one dealer.

Yesterday, the Toronto Stock Exchange's gold and precious minerals index fell 2.1 per cent as it played catchup with the price of bullion, which, despite an upward tick yesterday, has fallen steadily in the wake of the terrorist attacks on New York on Tuesday. While North American markets have been closed since shortly after the attack, gold traded in Europe and Asia.

The index fell 109.08 points to 5,141.64, giving up almost one-third of the 343.31 points it added on early Tuesday minutes after hijacked airplanes crashed into the World Trade Center in New York and the Pentagon in Washington.

The price of bullion rose $1.25 (U.S.) to $280.25 yesterday, reflecting a slight drop in the U.S. dollar based on the expectation that there will be additional interest rate cuts to support the economy.

Gold briefly reached $289 an ounce on Tuesday, up $17.40 an ounce.

The shares of industry heavyweights Barrick Gold Corp. fell 80 cents (Canadian) to $26.90; Placer Dome Inc. 20 cents to $18.40; and Franco-Nevada Mining Corp. 70 cents to $20.71.

"There's a whole bunch of moral suasion out there not to show weakness in the U.S. dollar," one trader said. "The U.S. administration is trying to create an aura of calm."

Said a second trader, "There's going to be a patriotic thing to do: 'Buy stocks when the market opens.' "

There are powerful attempts by the governments around the world to manage the economies through this crisis, and their chance of successfully dealing with the problems, at least in the short term, are quite good, the traders said.

"They are going to manage the economic affairs," said Terence Ortslan, a mining analyst with TSO & Associates of Montreal. "Gold will not be the big surprise element over the next few days."

There are rumours that attempts are being made to determine the trading positions of hedge funds and their overnight loan positions in light of the destruction of data that has occurred in New York, Mr. Ortslan said.

At the same time, the underlying weakness of the major world economies can be seen in the slide in base metal prices during the past two days on the London Metal Exchange. There are concerns the attack on the United States could reduce consumer spending and further slow the economy.

The prices of nickel, copper, lead, zinc and aluminum have declined between 2.2 per cent and 4.9 per cent.

Yesterday an official with Teck Cominco Ltd. told Bloomberg News that the company has suspended plans to double the capacity of its Peruvian zinc refinery because of the collapse in the metal's price and weak demand. The $296-million (U.S.) expansion of the Cajamarquilla refinery would have taken 21 months to complete, a spokeswoman said.