Gold higher in London after long holiday weekend

London (Platts)--30May2006

Gold moved higher in early London trade Tuesday after the three-day
weekend in the UK, underpinned by a weaker US dollar.
Spot bullion was indicated at $655.00-655.80/oz at 0800 GMT, up from the
previous London fixing at $642.25/oz on May 26 but in line with overnight
trading levels in Asia.
The euro was bid at $1.2849 at 0800 GMT, up from Friday's closing level
of $1.2751. The dollar was softer against the euro and yen in Asian trade
Tuesday amid speculation about a possible change in the US government's policy
on the currency.
"Economic data from the US is likely to be closely watched this week and
includes May consumer confidence, forecast at 101.5, as well as first-quarter
productivity and May ISM Index, Chicago PMI and non-farm payrolls," said James
Moore, analyst at thebulliondesk.com.
Analysts suggested that the market appeared to be building a base around
$640/oz. Forecasting the market to trade in a range between $640/oz and
$670/oz, Germany's Heraeus suggested in its latest weekly precious metals
report that some cautiousness would nevertheless be "appropriate."
"Given the small size of the market and the limited liquidity one cannot
completely rule out any surprises," the report said, adding that a
breakthrough on the downside could trigger more fund selling, with major
support possibly found only as low as $610/oz.
On the other hand, "any rise above $680/oz would suggest...that the metal
has kept its ability to fend off bearish attacks and that the overall uptrend
is still intact," it added.

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