Precious metals prices take sharp upturn as dollar weakens

New York (Platts)--25Oct2005

Gold led the precious metals complex on a major rally on the New York
futures exchanges Tuesday morning, as an unexpected decline of the dollar
triggered a buying spree, according to trade sources.

     The nearby December gold futures contract soared $7.80 to $474.80/oz at
10:44am on the COMEX, and the nearby December silver contract rose 15.2cts to
$7.86/oz. These moves triggered a similar reaction on NYMEX, where the
nearly January platinum contract rebounded $10.20 to $943/oz at 10:45am and
December palladium soared $6.20 to $220.

     According to one analyst, precious metals are moving in reaction to a
perception in the commodities and equity markets that the new US Federal
Reserve chairman might be less restrictive in managing the money supply than
outgoing chairman Alan Greenspan. "This may or may not be true, but that is
what people believe, and that is driving all the markets right now," the
analyst said, adding: "There is nothing fundamental that we see today to
affect the markets in this way."

     In reaction to this view, the dollar has taken a sudden downturn against
other major currencies. Against the euro, the greenback has weakened to
1.2105/euro and to 114.7 Japanese yen.

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