Gold continues to firm in Europe as oil futures rise

Gold continues to firm in Europe as oil futures rise

London (Platts)--28Sep2006

Gold continued to firm in Europe Thursday morning, taking its cue from a
rally in crude oil futures, which saw gold rebound after the New York session
close, according to the daily web site report from Standard Bank.
Gold finally broke above the 200-day moving average on its third attempt
in New York to close at $597.60/oz. It was indicated at $604.25-604.85 at 1012
GMT in London Thursday, a dollar higher from its morning fix, and up $10 from
its Wednesday afternoon fix of $593.75/oz.
"Having closed above the 200-day MA and the psychological $600/oz mark
gold has taken on a more bullish tone. However, the metal's recent correlation
with oil is likely to be crucial in determining short-term direction. Gold's
next hurdle is the $608-12/oz level, an area of previous chart
support/resistance," said James Moore of theBullionDesk.com.
Meanwhile the foreign exchange market awaited the release of the final
reading for US gross domestic product growth in the second quarter of 2006. It
remains to be seen whether the release alters market expectations that the US
Federal Reserve will keep interest rates on hold for some time at the current
level of 5.25%. The dollar was bid at $1.2718 against the euro at 1014 GMT
Thursday, down from $1.2700 at 1500 GMT Wednesday.

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