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gold rises in london as jewelers in india, europe

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    Gold Rises in London as Jewelers in India, Europe Stock Up

    Nov. 24 (Bloomberg) -- Gold rose for a third trading session in four in London as jewelers in India and Europe stocked up on the metal to meet demand.

    Jewelers bought a record $38 billion of gold in the 12 months ended in June as the global economy expanded, the producer-funded World Gold Council said Sept. 7. Jewelry demand, which makes up 73 percent of total consumption, gained 7.6 percent in the third quarter.

    ``Physical buying from India for the wedding season and in Europe before the Christmas holidays is underpinning the market,'' Ross Norman, a Saffron Walden, U.K.-based metals analyst with TheBullionDesk.com, said today.

    Gold for immediate delivery rose $1.23, or 0.3 percent, to $493.73 as of 4:34 p.m. in London. The metal has gained almost 13 percent this year, after advancing 5.5 percent the year before.

    India is the world's biggest consumer of gold jewelry. Demand for gold typically rises in the country's wedding season, which runs from September to December.

    The metal may reach $500 next week, should the dollar weaken against other major currencies, Norman said. ``Sentiment is very bullish at the moment,'' he said.

    A weaker dollar boosts the metal's appeal as an alternative investment to U.S. stocks and bonds. The correlation coefficient for gold and the euro is 0.67. That measures the coincidence of closing daily gains and declines in the past two years on a scale of -1, meaning prices move opposite each other, to 1, meaning they move in lockstep.

    Trading volumes were ``thin'' today, as the Thanksgiving break in the U.S. cut the number of potential buyers, Norman said.

    Inflation Hedge

    Gold for immediate delivery touched $495.50 an ounce in London on Nov. 22, the highest intraday price since December 1987, on increased investor demand for the metal as a hedge against inflation.

    Gold fell as much as 0.4 percent yesterday, the biggest one- day decline since Nov. 4, as investors sold before the Thanksgiving holiday in the U.S.

    Among other precious metals for immediate delivery in London, silver gained 6 cents, or 0.7 percent, to $8.16 an ounce. Palladium climbed $3.50, or 1.4 percent, to $256. Platinum advanced $2, or 0.2 percent, to $979.50.

    To contact the reporter on this story:
    Danielle Rossingh in London [email protected]
    Last Updated: November 24, 2005 12:22 EST

    http://quote.bloomberg.com/apps/news?pid=10000080&sid=aUqupx9aT_fE
 
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