Daily Gold Update

Source: MarketWatch

San Francisco— Gold futures climbed above $728 an ounce Monday to mark their highest level in at least 16 months as trouble at U.K. mortgage lender Northern Rock and nervousness ahead of tomorrow's key Federal Reserve decision on U.S. interest rates enhanced the metal's safe-haven appeal.

"The market is convinced that the dollar will go down after a Fed Funds interest rate cut," said Julian Phillips, an analyst at GoldForecaster.com. "Investment demand for gold…remains strong," he said in emailed comments. "It's really a case of catch-up by the short-term traders after conservative long-term holders bought in, in a big way, last week…. There is little doubt that gold is now here to stay above $700 and the market is reflecting it," he added. See full story.