London (Platts)--12Sep2007

European gold opened Wednesday on a higher level than that of the
previous day, thanks to "massive buying" in New York, which sent the yellow
metal up $9 to a 16-month high of $711.80/oz, according to Standard Bank in
its daily precious metals report.
     On Wednesday morning in Europe, bullion was quoted at $712.50/oz at 0700
GMT, up from $704.75/oz Tuesday, the bank noted.
     Standard Bank commented that factors remained set fair for continued
strength in gold, with West Texas Intermediate crude oil rallying higher on
Tuesday despite announced increased production by OPEC, rising wheat prices
boosting inflation, and the dollar depreciating in anticipation of a US rate
cut of 50 basis points -- 0.5%.
     The midmarket euro-dollar rate at 0826 GMT was $1.38455. 
     However, the bank noted that, with higher food and energy prices, "the
Fed may decide to cut rates only by 25 bps [basis points] a move that could
spark some buying of US treasuries as well as dollar appreciation."