Daily Gold Update

Source: Andrea Hotter, BridgeNews

London— Gold prices remained currency-denominated Monday with the markets cautiously watching the weakening global stock markets and players sitting on the sidelines in anticipation of a further deterioration in the worldwide economic outlook. Traders said spot gold proved surprisingly resolute, while in contrast platinum and palladium moved sideways with the downside favored near-term.

Spot gold moved around U.S. $273.00 per ounce in the morning session Monday and while few players were willing to take positions, the liquidation that several observers had expected did not happen. �The precious metals are caught between those who believe that prices are going lower due to lesser demand due to a slowing economy, and those who are buying the precious metals as, perhaps, somewhat of a safe harbor in these tumultuous times,� said Leonard Kaplan of Prospector Asset Management. �So far, they have balanced out fairly well as prices are just about where they were last week,� he added.

The markets are also watching activities in the currency markets for further indications of market direction. �While the dollar has been weak, based upon recent governmental fundamental reports on unemployment, it has not been so against the currencies that truly matter in the gold market,� Kaplan said. �The South African Rand continues to make new all time, since dawn of creation, lows while the Australian dollar has dropped and the Indian Rupee is hovering at important lows. It is these currencies, those of the producers and those of the consumers of gold, which are most important to the price,� he added.

Spot gold fixed at $273.20 from $273.15 previously. The pending Bank of England Auction of 20 tonnes of gold Wednesday is expected to see a slightly increased subscription rate once more, traders said, with a possible price rally immediately afterwards. Platinum and palladium meanwhile remained quiet, with platinum fixing at $443.00 from $442.00 previously and palladium fixing at $460.00 from $455.00 previously.