|ORO Y PLATA INTERNACIONAL S.A.
Gold price rises
6/10/07. Bargain hunters lifted the gold price but investors may be careful
about chasing the metal too strongly ahead of the US payrolls data, which
may offer clues to the future direction of interest rates.
Spot gold rose to $737.20/737.90 an ounce from $736.10/736.90 late in New
York. Gold had tumbled to its lowest in two weeks at $720.70 on Thursday
before rebounding after the dollar reversed course and turned lower.
'We've expected the Japanese to sell in Tokyo but it didn't happen. It looks
like gold has found good support at $735, which later encouraged people
to cover their shorts,' said a dealer in Hong Kong.
'It's mostly technical buying as well as bargain hunting,' said the dealer,
who pegged immediate resistance around $740.
The August 2008 gold contract on the Tokyo Commodity Exchange ended
the morning session up 35 yen per gram at 2,783 yen after falling to its
lowest in a week at 2,736 yen on Thursday.
Cash gold rallied to a 28-year high of $747.65 on Monday before a rebound
in the dollar sparked heavy selling from investors. Dealers pegged key
support levels at $722 and $720, while upside target was seen at $750.
'We have to see whether gold can hold above $720. If not, it will go down to
$705,' said Ronald Leung, director of Lee Cheong Gold Dealers in Hong
But gold's medium-term sentiment remained bullish because of a recent
rate cut in the US, uncertainty in the dollar's outlook and record high oil
prices which raised the metal's appeal as a hedge against inflation, said
The euro hardly moved at $1.4135, still within sight of a record high of
$1.4283 on electronic trading platform EBS on Monday. The dollar was flat
against the yen at 116.45 yen.
The dollar fell on Thursday on speculation the payrolls data would keep
the Federal Reserve on track to cut interest rates for the second time later
Lower interest rates may lift gold's appeal as an alternative investment to
currencies and bonds. The Fed's surprise move to slash interest rates by
50 basis points in mid-September helped gold's rally to multi-year highs.
A US jobs growth figure below the median expectation of 100,000 may
reignite a dollar-selling trend ignited last month after the Fed slashed its
interest rates to 4.75 per cent, said dealers.
Gold's fall from its highest in nearly three decades has brought relief to
consumers in India and the Middle East ahead of the festive seasons later
'Ideally most physical buying is seen during the correction phase of a
large rally. Such corrections are good for physical buyers who hunt for the
cheapest levels to buy,' said Pradeep Unni, analyst at Vision Commodities
Comex gold futures fell in Asia, with the most active December contract
down $1.5 an ounce at $742.3 from the New York settlement. On Monday, it
hit a 28-year high of $755.70.
In other precious metals, platinum rose to $1,362/1,367 an ounce from
$1,359.50/1,366.50 in New York. It had risen to $1,391 earlier this week,
within sight of last November's record high of $1,395.
Palladium gained to $366/371 an ounce from $365/369 in New York.
Silver edged up to $13.38/13.44 an ounce from late New York's $13.36/13.41