Gold rattles through $600/oz, may be hit by profit taking

Gold rattles through $600/oz, may be hit by profit taking

London (Platts)--11Apr2006

Bullion fixed at its highest level for 25 years in London on Tuesday
morning having broken though $600/oz overnight, a key psychological level, on
the back of further investment from speculators and fund managers.
Gold was fixed at $599.50/oz Tuesday morning up on its spot close in New
York at $597.40/oz and also up on its previous fixing in London on Monday
afternoon at $597.25/oz.
Silver has also posted good overnight gains vaulting through its $13/oz
resistance level, before succumbing to profit taking which has seen it slip to
a bid price of $12.75/oz at 0935 GMT up on its previous fixing in London on
Monday afternoon at $12.41/oz. Silver has been leading gold and the platinum
group metals higher on the back of speculation into the approval, launch and
impact that the Barclays iShares electronic traded fund is expected to have on
the market. Sentiment is mixed however, as Standard Bank suggests that
"Against the backdrop of global geopolitical tensions surrounding Iran's
nuclear ambitions and unconfirmed rumors of possible US military action, high
oil prices as benchmark West Texas Intermediate and Brent crude prices
threaten to cross $70/barrel and the resultant inflationary worries, as well
as speculative support spill-over from the hype surrounding silver, gold has
more fundamental reasons to head higher in the foreseeable future."
Specifically on silver, UBS analyst John Reade notes that in an "attempt
to predict the impact of the silver ETF, [UBS has] raised our short-term
silver price forecasts to $14/oz in one month and $16/oz in three months, all
based on the expected impact of the ETF."

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