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To: ms.smartest.person who wrote (1520)	10/6/2006 1:33:11 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

Gold out of steam after gains, bear trend stays Fri Oct 6, 2006 6:47 AM ET By Atul Prakash LONDON (Reuters) - Gold edged lower on Friday with a drop in oil prices and dealers said the metal may slip further as sentiment remained bearish following this week's sell-off. Platinum touched a six-month low before slightly recovering, while gold traded in a narrow $5-an-ounce band against an average $18 in the past three days, with the market keeping an eye on movements in oil and the dollar. "Gold is pretty much tracking what oil is doing. I think with oil breaking $60 a barrel again, gold is going to drift lower," said a precious metals dealer in London. "There will be physical buying but I don't know whether that will be enough to support the market. People are nervous and still hoping that we will see a rally, but it depends on oil." Spot gold <XAU= traded down at $570.90/571.90 an ounce by 1000 GMT, compared with $572.50/573.50 late on Thursday in New York, where it rose one percent. Oil fell below $60 a barrel, with traders weighing OPEC's plans to cut production against overflowing stockpiles in top consumer the United States. Oil prices are now down more than five percent from a week ago. "Near-term sentiment on gold is likely to remain weak, with this recovery possibly interpreted as a correction within a correction," Standard Bank said in a daily report. Investors were wary of buying fresh positions even though gold regained some strength the previous day after plunging almost 8 percent on Wednesday to $559.40 an ounce, the lowest since mid-June, from last week's high of $606.50. "Despite the bounce yesterday the return of weakness in the oil market is likely to weigh further on gold," James Moore, analyst at TheBullionDesk.com, said. "However ... a period of correction/consolidation is perfectly normal and is constructive longer-term, allowing investors to enter the market at more affordable levels." Physical gold buying in India, the world's largest consumer of the metal, gained momentum during the festival season. Appetite from the Middle East was also expected to be strong, dealers said. In other precious metals, silver fell to $11.01/11.11 an ounce from $11.07/11.14 late in New York, while platinum fell as low as $1,069, the lowest since mid-April, before recovering to $1,078/1,083, versus $1,081/1,086. Palladium fell to $296/301 an ounce from $299/304. Norilsk Nickel, the world's largest nickel and palladium miner, more than doubled net profit in the first half of 2006. It lifted platinum sales to 336,000 ounces in the first half of 2006, from 327,000 ounces a year ago. Palladium sales fell to 1.45 million ounces from 1.47 million. (Additional reporting by Chikafumi Hodo in Tokyo) © Reuters 2006. All rights reserved. today.reuters.com