COMEX gold prices supported by weaker US dollar, Fed rate pause

Washington (Platts)--9Aug2006

COMEX gold prices rose on Wednesday, supported by a pausing in the rise
of US federal interest rates. December gold is up $6 at $663.30/oz.

"The Fed rate had a beneficial impact on gold," said an analyst. "And
that is evident in the price." He said the strength in gold prices also was
supported by a weakened US dollar and the strength in oil prices. "This is all
very positive for gold," he said.

The analyst said the supply/demand fundamentals remain "extremely
positive. We are heading toward the traditional buying season in the third and
fourth quarters in Europe and Asia. It's a good physical time for buying."

He added that demand from investment players remains robust, so gold
"could strengthen from here." His forecast is for gold to hit $750 this year
"and hold there."

Meanwhile, silver is following gold's strength. "It is just responding to
the positive moves in gold." September silver is up 34 cents at $12.60/oz.

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