Singapore (Platts)--26Jul2007

Spot gold price fell below $680/oz in morning trade in Hong Kong
Thursday.
     Gold opened significantly lower at $675.90-676.40/oz from
$681.30-681.80/oz at the end of the afternoon trading session Wednesday.
     "Gold suffered a fall during the New York trading session Wednesday
mainly on funds' liquidation. The stronger US dollar also applied downward
pressure on gold. The firmer oil price's influence on gold was outweighed by
the stronger US dollar," one trader said. 
     Another trader agreed, adding that the US dollar rose in early trade
Wednesday on concern that subprime mortgage problems in the US might
eventually affect Asian and European economies. In New York, the US dollar
opened higher at Yen 120.49 from Yen 120.38 at Tuesday's close while the Euro
fell to $1.3741 from Tuesday's $1.3824. The US dollar then remained firm
against the Euro as investors unwind carry trade positions, and closed at Yen
120.47 and $1.3706 per euro.
     
     SPOT GOLD TRADE TO REMAIN SLOW; PLAYERS WAIT AND WATCH 
     "This weaker gold price at below $680/oz has been carried over into the
Asia morning from the New York market. Some follow-through selling was seen
in the morning, but in general the market was quite slow and gold held steady
at around $675/oz," the first trader said. He was skeptical that the spot gold
trade would pick up in the afternoon. "The price will remain rangebound with a
narrow spread of $1-2, as Asian players will be waiting and watching for the
London market to start later in the day," he added.
     Key economic indicators due later Thursday include July German IFO
economic index, June US durable goods orders, US jobless claims for week ended
July 21 and June US new home sales.

     MOST TOCOM GOLD FUTURES TRACK WEAKER SPOT GOLD
     Meanwhile, gold futures (standard contract of 1 kg) trading on the Tokyo
Commodity Exchange tracked weaker gold prices and fell Yen 8-14 (7-12 cents)/g
for the August 2007-June 2008 contracts at the end of the Thursday morning
session, settling at Yen 2,625-2,650/g. Turnover totaled 20,295 contracts
Thursday, down from 46,290 contracts Wednesday, indicating a quiet trading
session in the morning at TOCOM. 
     The mini contracts (100 g gold bars) for the August-December 2007
contracts on TOCOM were mixed. The August 2007 contract lost Yen 10 to settle
at Yen 2,629/g and the December 2007 contract dipped Yen 5 to settle at Yen
2,637/g, while the October 2007 contract inched up Yen 1 to settle at 2,641/g.
Turnover totaled 1,782 contracts Thursday, up from 1,949 contracts Wednesday.