Gold steady in morning trade, upside resistance seen at $631/oz

London (Platts)--13Dec2006

Gold was steady during London morning trade Wednesday, with further
dollar weakness expected to provide the precious metal with support.
Spot bullion was indicated at $628.75/oz at 0943 GMT Wednesday, inching
up slightly from its late New York spot price of $628.50/oz and its Tuesday
afternoon fix of $628/oz.
"The dollar weakness is likely to lend support, but we expect the upside
to be limited at $631/oz," said Paul Merrick, director of commodities at
Dresdner Kleinwort Wasserstein in London. He said this was seen as the
resistance level as it was where gold came under pressure on Tuesday.
Merrick said the dollar could weaken further Wednesday if US retail sales
figures, due out later in the day, were lower than expected. "This could
provide further support for gold," he added.
Bulliondesk.com analyst James Moore said reaction to trade data on
Tuesday "sparked a pocket of selling pressure which led gold to the day's low
of $626.40, with the market closing at $627.30. Reaction to the Fed statement
led the metal back to $629.50 in after-market trade."
He said while the recent consolidation phase had left gold in a far
healthier position to extend higher, "the market was struggling for traction
as further pockets of year-end long liquidation emerge. Despite this the metal
will continue to find good scaled-down buying with technical support pegged at
$622 and below around the $615 level with the 100 and 200 day MAs."
Meanwhile in the currency markets the euro was bid at $1.3256 at 0944 GMT
Wednesday, inching up from $1.3230 at 1600 GMT Tuesday.

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