Gold slides in Europe as US dollar posts good gains

London (Platts)--19Oct2005

Bullion continues to take direction from the currencies and particularly
the dollar and consequently fell Wednesday during the European session. Gold
was bid at $465.40/oz at 1535 GMT, down on its afternoon fix at $465.90/oz. 
     Fears in the US that the Federal Reserve will continue to raise interest
rates has sparked debates about inflation. This has seen the euro slide to
three month lows at $1.1876 against the greenback and it has had a knock on
effect on gold. "The precious complex has continued to sag under dollar
related selling pressure today amidst speculation from currency traders that
the US Federal Reserve will maintain its policy of 'measured' interest rate
increases," said analyst with thebulliondesk.com, James Moore, adding: 
     "Despite oil prices ticking higher today, I think the market has entered
a corrective phase. The break of the $468 level is likely to act as a trigger
for a gradual slide back to mid-$450s, where the physical interest from
India, which till now has been distinctly absent, will start to emerge."
--James O'Connell, james_oconnell@platts.com

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