Daily Gold Update

Source: Deborah Kinirons, BridgeNews

New York— COMEX Dec gold settled up $1.8 at $278.6 per ounce as a weaker dollar drove gold to post its fourth straight day of gains. Open interest in gold as of Friday.s trading showed that total open interest rose by 12,030 contracts to 112,910 contracts. One trader attributed the rise in open interest to the addition of fund long positions.

As a dollar-denominated commodity gold becomes relatively less expensive when the dollar weakens. Meger called the rise in open interest, .generally a positive sign for the market..

In early trading gold climbed to a fresh six-week high of $280.2, briefly trading above resistance at $280.0 Dealers and analysts pointed to dollar weakness and rumored short-covering as the main reason for bullion.s gains.

In the news, the producer-funded World Gold Council said that gold demand for the second quarter of 2001 was 764 tonnes, a fall of 3% compared with a similar period a year ago. The fall was due to significantly weaker demand in Turkey and Taiwan as well as a slowdown in the global economy, said the WGC in its quarterly survey, Gold Demand Trends, published Monday.

Demand in the first half of 2001 was 1601 tonnes, up 1% on the same period the previous year. The WGC also said demand prospects for India, the world.s largest market, .look promising. for the third quarter. The WGC said signs are that the harvest will be good and demand will be boosted by a significant number of auspicious days for weddings in the third and particularly, the fourth quarters.