INDUSTRY BULLETIN – OPENING MARKETS
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From Kitco.com
http://today.reuters.com/investing/MarketReportArticle.aspx?type=goldMktRpt&storyID=URI:urn:newsml:reuters.com:20060220:MTFH33269_2006-02-20_10-58-07_L20568135:1
UPDATE 3-Gold extends gains on firm oil, drop in dollar
Mon Feb 20, 2006 5:57 AM ET
(Pvs Tokyo, updates with quotes, prices)
LONDON, Feb 20 (Reuters) - Gold prices moved to 10-day highs on Monday, supported by a rise in crude oil and a drop in the dollar, and dealers said the metal was expected to extend gains.
Other precious metals followed gold higher after tumbling in the previous week, with platinum rising nearly two percent and with silver climbing to its highest in more than a week.
``The downside appears quite limited at present...There are factors pointing to further gains in the gold market in the short term,`` said Yingxi Yu, analyst at Barclays Capital, citing firm oil prices and a weakening dollar.
Spot gold
Gold fell to a one-month low around $534 early last week as the market consolidated after a steep correction from a 25-year high of $574.60 reached on Feb. 2.
Dealers were cautious as physical demand was slow and investors would be absent from the New York market on Monday due to the Presidents Day holiday.
``We remain cautious about the near term outlook for gold, as the recent corrections have yet to see convincing interest from the jewellery market, which is normally responsible for 80 percent of gold demand,`` said John Reade, analyst at UBS Investment Bank.
He said in a report that gold was expected to trade in a wide range of $535 and $575 in the near term.
Asian and European players bought back metals as crude oil prices jumped after militant attacks over the weekend crippled production in OPEC member Nigeria, the world`s eighth-largest exporter. Gold is often seen as a hedge against inflation.
The dollar slipped, making gold cheaper for holders of other currencies.
Gold futures on the Tokyo Commodity Exchange (TOCOM) <0#JAU:> also gained, with the benchmark December contract closing at 2,137 yen ($18.08) per gram, up 2 percent or 41 yen from Friday`s Tokyo settlement.
Spot silver
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