Hong Kong gold opens slightly higher after Fed rate decision

Hong Kong gold opens slightly higher after Fed rate decision

Hong Kong (Platts)--20Sep2006

Hong Kong gold prices opened slightly higher at around $577/oz on
Thursday, up from Wednesday's close at around $575/oz. Gold trade, however,
remained sluggish affected by the weakness in oil prices, according to local
traders.
One trader said: "Prices are hardly moving much after the US Federal
Reserve left its key interest rate unchanged on Wednesday as expected. Gold
prices are not reacting much to the interest rate result as it's within market
expectation."
He added that gold prices were set to move within a range of $570-590/oz
in the near future. "I don't see that there will be any major changes on gold
prices in the short term as the market is lacking fresh market news to trigger
any major price moves," the trader said.
Another trader said continued weaker oil prices were set to continue
putting pressure on gold prices. "Some fund players are still cautious about
entering the gold market, and watching oil prices for future market direction.
Recent oil prices are weak and this has discouraged fund players from entering
the precious metals market," he said.
Meanwhile, gold futures contracts trading on the Tokyo Commodity Exchange
closed the morning session mixed. The most actively traded far forward August
2007 gold contract finished at Yen 2,186 ($18.70)/g, down Yen 2 from
Wednesday's close.

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