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To: maceng2 who wrote (501)	12/17/2003 3:58:33 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

Gold Driven Higher in Asia Wed December 17, 2003 12:57 AM ET reuters.com By Lewa Pardomuan SINGAPORE (Reuters) - Gold rose in Asia on Wednesday and looked set to hold above the key $400-an-ounce support this month on a weak U.S. dollar and receding fears of a heavy year-end profit-taking. "The 'Saddam effect' seen on Monday was a flash in the pan with market seeing the dip toward $400 as a buying opportunity," said Martin Mayne, associate director at NM Rothschild in Sydney. "The expected profit-taking as we approach year-end has failed to materialize. Looking ahead to next year, it is difficult to see gold much below $400," he said. Gold fell as much as $7 an ounce in Asia on Monday, touching a low of $401.00, after the dollar rose against major currencies following the capture of former Iraqi leader Saddam Hussein. But the dollar's rise was short-lived as worries returned about the ballooning U.S. current account deficit. Spot gold (XAU=: Quote, Profile, Research) was quoted at $409.00/409.75 an ounce by 11:27 p.m. EST Tuesday compared with New York's last quoted level of $407.25/408.00. Key resistance was pegged at $412.00 an ounce. Some traders and analysts had said gold could fall to $390 this month because investors liked to book profits before the end of the year. "But it looks like gold will continue pushing higher. It may not break a new high immediately but it will move up closer to $412," said one precious metal analyst in Sydney. "The market has consolidated to stay above $400 level and looks for opportunity to break $412, then rising to $418 and $430." Gold has risen 18 percent this year to its highest in nearly eight years. A breach of the $417.70 peak it hit in early 1996 would take gold back to its strongest in just under 13 years. The dollar traded near record lows against the euro on Wednesday after surprisingly subdued U.S. inflation data indicated interest rates would stay low for some time. The dollar was at 107.52 yen (JPY=: Quote, Profile, Research) , while the euro (EUR=: Quote, Profile, Research) was at $1.2322. In Tokyo, the benchmark October 2004 gold futures contract (JAUV4: Quote, Profile, Research) on the Tokyo Commodity Exchange fell six yen per gram to 1,414 yen per gram due to a firmer yen. Dealers and analysts said funds remained long in COMEX gold but they had trimmed positions in the latest weekly CFTC commitments of traders data issued last Friday. Physical demand also showed signs of improvement despite rising gold prices. Funds reduced their net long positions to 107,028 contracts as of Dec 9 from 112,855 as of Dec 2. "At this stage, the historically high speculative long positions on COMEX appear robust and are good indicators of market expectations. We need to look at these for signs of sentiment change," said Darko Kuzmanovic, portfolio manager at Deutsche Asset Management in Sydney. "One of the big negatives of physical demand has been the recent poor Indian monsoon buying season. It appears that Indian consumers have been price sensitive as well. (But) there appear to be signs of improvement," he said, referring to the world's largest consumer. Gold Fields Mineral Services (GFMS), a leading mine research group, said last month speculative purchases of gold soared in the third quarter of 2003, contributing to a five percent rise in total demand. Spot platinum (XPT=: Quote, Profile, Research) was quoted at $828.00/833.00 an ounce, spot silver (XAG=: Quote, Profile, Research) at $5.61/5.63 and palladium (XPD=: Quote, Profile, Research) at $198.00/203.00