Singapore (Platts)--16May2007

Spot gold prices rebounded above $670/oz at the start of the morning
session in Hong Kong Wednesday, opening higher at $672-672.50/oz from
Tuesday's close of $668.20-668.70/oz.
     Local traders said the spot gold price received a boost on active buying
during the New York trading session the previous night.
     "Spot gold rose above $670/oz during New York trade as fund managers were
busy buying on the back of a weaker US dollar and a firmer oil price," one
trader said. He attributed the weaker US dollar on predictable US statistics
released the previous day and a firmer oil price on a fresh round of concerns
about Nigerian oil supply.
     Another trader said major currencies were steady on Tuesday pending US
inflation data as investors wanted to see if it backs up expectations of a
Federal Reserve interest rate cut, which would lessen the US dollar's yield
appeal. In New York, the US dollar opened higher at Yen 120.38 from Yen 120.26
at Monday's close while the euro fell to $1.3536 from $1.3537. The US dollar
then fell against the euro as investors focused on the outlook for US interest
rates after core consumer price data met expectations, and closed at Yen
120.26 and $1.3589 per euro. 
     He added that June gold closed $4.40 higher at $674.50/oz and June crude
oil closed 71 cents higher at $63.17/bbl in New York trade.
     The first trader said the spot gold price remained rangebound amid thin
trade mainly from Japanese buyers in Asia's Wednesday morning trade, while
the second trader said spot gold may test support at $664.50/oz where a breach
would shift focus to $660/oz and selling can be considered on upticks towards
$677.50/oz with stops at $681/oz.
     Some major statistics due later Wednesday are the April Euro-zone
consumer price index and April US housing starts.
     Meanwhile, gold futures contracts trading on the Tokyo Commodity Exchange
tracked the firmer spot gold price and gained Yen 8-12(7-10 cents)/g for the
June 2007-April 2008 contracts, which closed at Yen 2,601-2,627/g at the end
of the morning session on Wednesday. The most actively traded far forward
April 2008 gold contract closed the morning session at Yen 2,627/g Wednesday,
up Yen 10 from Tuesday's close.