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To: MulhollandDrive who wrote (250512)	7/16/2003 2:47:43 PM
From: Secret_Agent_Man	Read Replies (1) \| Respond to of 436258

Dow Jones Business News Gold Slide Temporary - Commonwealth Bank of Australia Wednesday July 16, 5:02 am ET Canberra, July 16 (Dow Jones) - A recent slide for spot gold that accelerated this week and was inspired by increased optimism about the U.S. economy and a stronger dollar likely will be temporary, according to an analysis issued Wednesday by Commonwealth Bank of Australia. Despite recent strength, the dollar should resume its decline against the euro this calendar half, the bank said. The U.S. has a "massive" current account deficit and to date has declined only modestly on a trade weighted index basis, it said. "A stronger U.S. economy will mean that the pace of the U.S. dollar decline will simply slow," Commonwealth Bank said in a monthly analysis. North Korea remains a source of great concern, with this pushing North Asian bullion investors to increase their safe haven buying of the precious metal, it said. As a result, gold will hold above a key technical level of US$340 an ounce and appears set for a modest runup with US$360/oz an attainable target over the next month, it said. Spot gold averaged US$347/oz in the second calendar quarter. Spot gold touched US$350 an ounce in intraday trading Tuesday, but then slumped as the U.S. dollar strengthened. At 0800 GMT Wednesday, spot gold was quoted around US$342.50/oz. Longer term, Commonwealth Bank said a weaker dollar, ample monetary system liquidity and geopolitical concerns should maintain investor interest for some calendar quarters. "Deregulation in North Asian gold markets should favor further investor demand," it said. Supply side factors also support a higher gold price, it said. Further unwinding of hedge positions by leading producers will support the price, while low world interest rates will keep contangos slim and contribute to a lack of forward selling, it said. The prospect of sluggish growth in mine output in the next several years should also lend support to the price of gold, it said. Ray Brindal, Dow Jones Newswires, 612-6208-0902