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Gold up on physical buying, weak dollar sentiment
Monday, November 20th, 2006 Posted in Gold News |
Gold rose on strong buying from physical players and weak dollar sentiment following losses on Friday, while platinum benefited from strong fund buying in Asia earlier.
Source: Forbes
AFX News Limited
Metals - Gold up on physical buying, weak dollar sentiment; platinum surges
11.20.2006, 10:13 AM
LONDON (AFX) - Gold rose on strong buying from physical players and weak dollar sentiment following losses on Friday, while platinum benefited from strong fund buying in Asia earlier.
At 2.44 pm, spot gold, which earlier touched an intra-day high of
626.80 usd, was quoted at 626.30 usd, up from 621.80 usd at the time of the Comex market close in New York on Friday.
Other precious metals were also up. Spot silver rose to 12.98 usd an ounce against 12.77 usd, platinum surged to 1,250.00 usd against 1,186.00 usd, while palladium edged up to 324.50 usd against 318.00 usd.
‘Gold has again found good physical interest this morning and should continue to benefit from the recent bearish sentiment towards the dollar,’ said TheBullionDesk.com analyst James Moore.
Gold often moves counter to the US dollar because it is seen as an alternate investment to the currency. Also, a weak dollar makes gold cheaper for holders of other currencies.
The dollar fell on Friday after data showing a very sharp decline in new home construction in the US increased speculation of an interest rate cut by the Fed in the new year.
The currency has strengthened against the yen today while dipping against the euro. Analysts expect trade to remain subdued this week as traders start winding down activity ahead of the Thanksgiving holiday in the US Thursday.
‘Gold appears to be settling into a solid, if rather wide range. Although sagging crude and soft base metals have kept the metal rather heavy, a weaker dollar is preventing the metal from free-falling.
‘We hold our one-month forecasts at 640 usd an ounce although we expect further gains early in the new year, hence our three-month forecast of 670 usd an ounce,’ said UBS Investment Bank analyst.
Elsewhere, platinum posted very strong gains, reversing Friday’s slump to a two-week low, after aggressive buying from Tokyo Commodity Exchange funds and dealers emerged in Asia earlier.
Moore said the metal was benefiting from the fact that Friday’s dip, which saw platinum fall as low 1,138.00 usd an an ounce, failed to spark follow-through selling.
maytaal.angel@afxnews.com
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