Gold: 369.40
Silver 4.84
USD: 93.72
Spot gold hovers near 14-wk high, seen firm
>>"Gold's outperformance of the strengthening euro has attracted some speculative money back into the metal and we believe that the metal can trade higher in the near term," John Reade, analyst with UBS Warburg said in a report.<<
Tue May 20, 2003 06:10 AM ET
By Clare Black
LONDON, May 20 (Reuters) - Gold moved off an earlier a 3-1/2 month high just below $370 an ounce on Tuesday in Europe, but it was seen remaining firm on dollar weakness and Middle East violence, which have sucked money back into the market.
Spot bullion jumped more more than $6 overnight as the dollar's rebound from two-year lows against the Japanese yen shoved Tokyo gold futures up by the daily 40-yen price limit.
Ongoing dollar weakness, combined with gathering tension in the Middle East and global economic woes have enhanced the metal's reputation as a safe haven in troubled times.
"All the planets are lining up for gold," said David Thurtell, commodities strategist at Commonwealth Bank of Australia.
Spot gold was quoted at $367.90/368.60 an ounce at 1000 GMT, having marched up to $369.50 -- a level not seen since February 10. That compared with $363.75/364.50 last quoted in New York.
"Gold's outperformance of the strengthening euro has attracted some speculative money back into the metal and we believe that the metal can trade higher in the near term," John Reade, analyst with UBS Warburg said in a report.
Spot gold has surged away from its low for the year of $318.75 hit in early April, when U.S. military success in Iraq prompted a sell-off after months of safe-haven buying.
But it is now only some $20 away from April's 6-1/2 year high at $388.50.
Some analysts were a little concerned that gold's latest run-up was overdone. "Further buying may push the yellow metal to $372/5, but I think some consolidation may be needed in order to maintain an orderly rally," James Moore of TheBullionDesk.com said.
Traders felt that gold had a good chance of cracking the $370/oz level later in the day, noting good fund buying earlier.
A wave of Palestinian suicide bombings has battered a tenuous U.S.-led "road map" to Middle East peace, with a fifth attack in three days killing three people in an Israeli shopping mall on Monday.
In the currency market, the dollar steadied above multi-year lows against the yen and the euro , but analysts were looking for more losses.
"The dollar is massively influential," one London trader said. "I feel there is a genuine need and want for the stuff (gold) at the moment."
Gold's bounce pulled other precious metals higher, sending silver to $4.83/85 an ounce from $4.80/82 last quoted in New York.
Platinum rose to $666.00/671.00 an ounce versus New York's last $653.00/658.00, helped by a widely watched report by precious metals refiner Johnson Matthey forecasting platinum prices in the $590-$690 range for the rest of 2003.
Spot palladium firmed to $165.00/172.00 an ounce, versus $160.00/165.00. (Additional reporting by Tim Large in Tokyo.)
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