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Monday, Aug 11, 2003

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Columns - Global Monitor

Gold moving up firmly

G. Chandrashekhar

Mumbai , Aug. 10

GOLD treaded a firm upward path last week following evidence of buying interest. Beginning the week softly, the yellow metal continued the softer tone from previous Friday, with prices being held below $350 an ounce and driven intra-day by movements in the US dollar.

However, as the week progressed, continued buying interest became increasingly prevalent with prices managing to break back over $350/oz mid-week and then pushing higher to close the week on a strong note.

Interestingly, the fund buying came despite the last Comex commitment of traders report revealing that the net long position of large speculators nearly doubled during week to July 29 rising 112.1 tonnes to 234.7 tonnes.

``Buying interest continued to be a mixture of currency (mainly euro/US dollar) driven interest, commodity basket buying (until Friday when base metals suffered a profit-taking rout while precious metals and oil were firm), and reports through the week of good physical buying demand'', commented Mr Kamal Naqvi, analyst with Macquarie Research Equities.

Official Friday price of gold was $353.95/oz (London PM fix) versus $352.35/oz previous Friday. Silver, on the other hand, shed 1.4 per cent during the week to be quoted at $5.05/oz on Friday (London AM fix).

Silver had an interesting week, falling quickly back below $5.00/oz towards $4.90/oz, but then bouncing late in the week, particularly on Friday, to recover to around $5.05/oz, assisted by the move in gold and, luckily, breaking its recent link with base metal movements, pointed out the analyst.

On Friday, platinum was quoted at $680/oz (London Pm fix) versus $677/oz previous Friday, while palladium shed 3.8 per cent during the week and quoted at $175/oz.

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