Daily Gold Update

Source: Reuters

London— Gold failed to deliver again on Wednesday as it shied away from resistance at $270 despite much-needed impetus from a weaker U.S. dollar.

"Gold has failed to respond to the weakening of the dollar, with the $270 level continuing to prove more or less impenetrable and prompting profit taking from long position holders," said one analyst.

"The chart gap at $271-$272, dating back to October 1999, is not helping."

While gold often acts like a currency and responds to moves in foreign exchange markets, it did not bat an eyelid at Wednesday's euro or Aussie dollar strength.

An early two-week high in the euro failed to kickstart gold into action and physical buying flows remained small but steady.

Traders cited the Muslim fasting month of Ramadan as taking some important participants out of action, while the professional market was concentrating on the rolling of December contracts to the February or March ones.

"The prospects for an improvement in prices remain promising, but it is still going to be hard work, and in need of further dollar depreciation," added the analyst.

Spot bullion ended the European session at $268.60/$269.10, from Tuesday's New York close of $269.45/$269.95.

Silver fell back slightly in line with gold but held on to its new, higher range. Bullion ended at $4.67/$4.69 from $4.69/$4.71. Next target was placed at $4.75 while support was seen strong at $4.65/$4.66.

The PGMs were steady at the top end of recent ranges, with palladium fixing in the afternoon at the key resistance level of $800. Platinum ixed lower in the afternoon after a morning fix at $600 — a level spot prices were finding tough to breach.

Strong consumer demand from both the industrial and jewellery sectors in particular were seen keeping platinum firm, while uncertainty over 2001 contract shipments from Russia was helping palladium.

Spot platinum was last at $597.00/$603.00 from Tuesday's New York close of $594.00/$604.00. Palladium was last at $800.00/$815.00 from $795.00/$805.00.