London gold holds overnight gains in early trade, eyes $630/oz

London (Platts)--19Apr2006

Gold prices continued to push higher in early London trade Wednesday,
boosted by soaring energy prices which have sparked renewed inflationary fears
and geopolitical concerns as tensions build between the US and Iran.

Spot bullion was indicated at $622.60-623.40/oz at 0800 GMT, in line with
overnight prices in Asia but up sharply from Tuesday's afternoon fixing in
London at $614.75/oz.

"With little change in market sentiment and with
safe-haven/anti-inflationary money continuing to flow towards the precious
complex, gold should now look to test resistance around $630-35/oz which dates
back to December 1980," said James Moore, analyst at thebulliondesk.com.

Standard Bank London, in its daily web site report, suggested that the
market could look to take a breather before resuming its march higher: "With
the $625/oz target in sight and if breached, gold could look towards $650/oz
next, although some consolidation should be expected after gold's $20-odd
rally above the psychological $600/oz level, which should prove to be a firm
support base going forward."

Crude oil futures pulled back in early electronic trade Wednesday from
record high settle prices on Tuesday, but continued to find support from a
number of bullish factors ahead of US inventory data due out later in the day.
"The markets are still firmly in the grip of several bullish factors
[including] a steadily deteriorating Iranian situation, no change in the
Nigerian export picture, sharp gasoline draws in the US, strong chart patterns
and expanded open interest levels in crude fueled by a general infatuation
with commodities," Man Financial analysts wrote in a note to clients Tuesday.
The euro was bid at $1.2352 at 0800 GMT, virtually unmoved from Tuesday's
close as the market consolidated the previous day's gains. The focus of the
currency markets' attention Wednesday is likely to be the release of US
consumer price index figures for March, due out at 1230 GMT.

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