Gold heading for a "choppy" day: analyst

London (Platts)--14Mar2007

Another burst of market instability in the US overnight, brought about by
concerns over weakness in the US housing sector, prompted at least one analyst
to predict a fairly unstable day for gold.
"I can see Wednesday being pretty choppy for gold, and for the markets in
general," said a London-based analyst. "I think yesterday's fall in the US was
a knee-jerk reaction, but the market is still fairly jittery when it comes to
equities."
The analyst argued that people have a tendency "to overreact when the
stock market wobbles" and forget that gold is often bought "as an insurance
policy." Tuesday saw the Dow Jones industrial average, S&P 500 and Nasdaq
experience steep falls.
James Moore, of the TheBullionDesk.com, commented that gold was
continuing to look vulnerable, adding: "I don't think this is the end of the
corrective phase as further risk reduction, and the necessity to generate cash
for margin calls are likely to see gold and other commodity markets sold off."
London spot gold was bid at 639.90/oz at 1135 GMT, while the euro stood
at to $1.3182. London gold was fixed at $640.75/oz Wednesday morning, dowm
from Tuesday's PM fix of $650.80/oz.