Gold Holds Near Six-Year Highs
Fri January 24, 2003 06:35 AM ET
>>"Gold continues to look set to make further gains and with the 27 January UN weapons inspection-reporting deadline looming large, this is hardly a week to go home short gold or long the U.S. dollar," said John Reade, metals analyst at UBS Warburg.
"Consequently, we expect gold to at least hold onto its gains into the end of the week if not move higher still," Reade said.<<
LONDON (Reuters) - Gold came under light profit-taking in Europe on Friday but held close to six-year highs as investors geared up for a critical week for Iraq.
Spot gold XAU= was quoted at $363.75/364.50 an ounce at 6:21 a.m. EST, lower than New York's last quoted $364.50/365.00 on Thursday where it hit a new six-year high of $367.60.
The precious metal, which acts as an insurance policy in times of looming war, fragile stock markets and a sickly dollar, is 30 percent higher than at this time last year.
"Gold continues to look set to make further gains and with the 27 January UN weapons inspection-reporting deadline looming large, this is hardly a week to go home short gold or long the U.S. dollar," said John Reade, metals analyst at UBS Warburg.
"Consequently, we expect gold to at least hold onto its gains into the end of the week if not move higher still," Reade said.
Chief U.N. weapons inspector Hans Blix on Monday presents a major report on his teams' operations in Iraq and the level of cooperation from the Baghdad government over the past two months.
The report is likely to receive harsh scrutiny from the Bush administration, which has already publicly criticized Blix's description of his efforts as seeking a "smoking gun."
On Tuesday, U.S. President George W.Bush will give his State of the Union address to Congress, an opportunity for the president to rally supporters for an attack on Iraq -- with or without U.N. approval.
"ASK SADDAM"
"Where is gold going next week? Ask Saddam Hussein," said David Fuller, senior manager at Westpac Banking Corp in Sydney.
Gold was set or "fixed" in the London morning session at $364.10 an ounce, down from the previous $364.70 an ounce which was its highest fix level since January, 1997.
"I very much doubt we will see much selling interest today, with the usual weekend insurance buying likely to lead to another test of the highs," said James Moore, analyst at TheBullionDesk.com.
"$358-60 will provide strong support for the moment, while resistance should be found around yesterday's high at $367.50 but there is definitely room for a test to $370 and higher," Moore said.
Fresh dollar weakness also supported the yellow metal after it hit another set of multi-year lows against European currencies EUR= on worries of a breakdown in relations between the U.S. and its key G7 partners over possible military action in Iraq.
In other precious metals silver XAG= was quoted at $4.77/4.79, unchanged from the New York close on Thursday.
reuters.com |
