update on valuable metals from the wires..

  1. 2,154 Posts.

    GOLD 332.90/3.40 * 310.00 * 340.00 * 82 * 326.43 * 321.51

    SILVER 4.69/4.71 * 4.50 * 4.90 * 74 * 4.63 * 4.54

    PLAT 601.50/6.50 * 590.00 * 610.00 * 71 * 595.81 * 590.22

    ----------------- VIEWS FROM THE MARKET - Dec 16 --------------

    LONDON, Dec 16 (Reuters) - Prospects of war in Iraq,

    combined with fears of further acts of terror, a weak dollar and

    falling stock markets are seen supporting gold close to

    three-year price highs on Monday, analysts and traders said.

    The yellow metal now faces a key test of resistance at $335

    an ounce and then $340. Silver and platinum markets are seen

    tracking bullion.

    GOLD - Gold has attracted major fund interest in recent

    sessions, pushing the metal to three-year highs and sealing a 20

    percent rise in the yellow metal since the start of the year.

    At 0751 GMT spot gold was quoted at $333.60/334.10 an ounce,

    up from Friday's New York close of $332.90/333.40.

    Spot gold struck a new three-year high of $335.25 in New

    York trade on Friday, on talk of Washington's possible use of

    nuclear weapons against Iraq, higher oil prices and a sharp

    weakening of the U.S. dollar against the euro.

    "The weakening dollar and positive oil price should continue

    to underpin the gold price in the days ahead. Technically the

    yellow metal looks solid between $330 and $328, which should

    encourage cherry picking on any dip," said Standard Bank London.

    "The upside looks capped at $336 for the time being, but

    with the year-end approaching fast and $340 in the funds'

    sights, another attempt to move higher would not appear

    unreasonable," it said in a report.

    A relative strength index (RSI) indicator of 82 also pointed

    to potential selling.

    "In our view, it is going to be very heavy going for gold

    above $335 towards key resistance at $340," said Kamal Naqvi,

    metals analyst at Macquarie Research in London.

    "It would require very aggressive buying to absorb the

    selling that is likely to occur through these levels and it is

    difficult to believe that such buying will occur without a

    major catalyst be it economic or political," said Naqvi.

    The dollar pared some losses in Asia but was

    pressured by wariness over what will happen next in Iraq and

    lingering doubts about Washington's commitment to a strong

    dollar policy.

    "The link between the new highs in the euro and those

    of gold are indicative of the degree to which the price of

    gold has become a proxy for a weaker U.S. dollar," Naqvi said.

    The cocktail of bullish factors fanning gold's end-year

    rally was a potentially major tuning point for the metal,

    analysts said.

    "Gold now, in our opinion, lives in a world where $300 can

    be seen as a price floor rather than a price ceiling," said

    Martin Squires, analyst at J.P. Morgan Securities.

    SILVER - Silver was seen content to track gold's movements

    traders said,

    At 0751 GMT spot silver was quoted at $4.70/4.72 an ounce,

    up from Friday's New York close of $4.69/4.71.

    "Silver should trade within a $4.65 and $4.78 trading range

    and will look to gold for short-term direction within these

    parameters," said Standard Bank London.

    PLATINUM - Platinum was also seen getting support from fund

    interest in precious metals though further stock market falls

    would cut into industrial demand for the metal.

    At 0751 GMT spot platinum was quoted at $602.00/607.00, up

    from Friday's $601.50/606.50 close.

    ((Reporting by Steven Swindells, editing by Tony Austin;

    [email protected]; Instant Messaging

    [email protected]; +44 7542 6056))
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