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To: ms.smartest.person who wrote (2252)	3/19/2007 1:57:11 PM
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Return of investors triggers gold price advance Mon Mar 19, 2007 5:22 PM GMT147 By Atul Prakash LONDON (Reuters) - Gold rose to its highest in more than a week on Monday, driven by speculative buying and a return of investor confidence after the recent sell-off. Silver and platinum hit two-week peaks, while palladium prices climbed to their highest since March 9. Spot gold rose as high as $656.25 an ounce and was quoted at $654.70/655.45 by 1506 GMT, against $651.90/652.90 in New York late on Friday. "The market has pretty well recovered. Today what really prevails is the positive sentiment for gold and the fact that gold has broken $650 and managed to remain above that level," Frederic Panizzutti, metals analyst at MKS Finance, said. "That has opened up a new range between $650 and $680, probably paving the way for a move higher." Gold hit a six-week low of $632.30 on March 6, when tumbling global stocks and a rising yen forced risk-averse investors to sell gold to cover losses. It fell to a one-week low of around $636 last week on fears about another global flight from risk. "On a short-term basis, the metal doesn't look too bad. However, it has to rise above $658 to confirm the current positive trend," said Wolfgang Wrzesniok-Rossbach, head of marketing and sales at Germany's Heraeus. Investors focused on a two-day meeting of the U.S. Federal Reserve that starts on Tuesday. Worries that the U.S. subprime mortgage crisis could hurt the broader economy and prompt the Fed to cut interest rates sent the dollar down to a three-month low against a basket of currencies in the previous session. The dollar was slightly higher against the euro, while oil steadied around $57 a barrel, drawing support from investors' expectations of strong gasoline demand this summer. Gold often moves in the opposite direction to the dollar and is generally seen as a hedge against oil-led inflation. LIQUIDATION WORRIES Analysts said the net long position in the gold market stood at about 14.4 million ounces, down from a recent peak of 21.6 million in late February, but the drop reported last week was lower than some people had expected. "With somewhat less long liquidation than we expected we have not received the clear signal that gold has bottomed. Although positions are greatly reduced, there could be more long liquidation to come," UBS Investment Bank said in a report. "Gold may have another dip lower on further long liquidation if broader asset market weakness continues, but we continue to forecast higher one-month and three-month gold prices at $700 and $750/oz respectively." The market ignored moves by China, which raised interest rates over the weekend for the third time in less than a year to trim credit and investment growth and cool down its economy. Dealers said the announcements were expected. In other metals, platinum rose as high as $1,229 an ounce and was last quoted at $1,225/1,230, versus $1,220/1,225. "There is now a very strong technical resistance just below $1,230 an ounce. Should this line be crossed, there is a danger that the price could very quickly jump back above $1,250 and thus to the highs seen at the end of February," Wrzesniok-Rossbach said. Silver rose to $13.21/13.24 from $13.13/13.16 an ounce, while palladium was up $3 at $352/357 an ounce. © Reuters 2007. All Rights Reserved. za.today.reuters.com