FinancialAdvisor's College Class (FACC)

[FinancialAdvisor]

Gold eases, bargain hunting to support

Gold eases, bargain hunting to support
Wed Feb 22, 2006 8:17 AM GMT

TOKYO (Reuters) - Gold inched down on Wednesday from the previous New York trade, but losses were seen likely to be limited as investors and funds were expected to buy on dips due to geopolitical concerns.

The near-term technical trend was bullish, with spot gold above the seven-day moving average (MA) of $549 and the 14-day MA of $552, but it has faced some resistance near the 30-day MA of around $556 since the start of the week.

At 0245 GMT, spot gold was trading at $553.25/554.00 per ounce, a touch softer than $554.70/$555.40 last quoted in New York on Tuesday.

"There will be a flight to gold as investors seek to place their money in what they see as a safer investment," said Koji Suzuki, a market analyst at Livedoor Commodity.

He said disruption of crude oil production in Nigeria due to unrest there has been among the factors that have recently helped lift crude oil, which in turn has sparked speculative buying in the precious metal.

The new NYMEX crude contract for April delivery was trading at around $62.44 per barrel on Wednesday.

Gold also often gets a boost from high oil prices as investors look to the metal as an inflation hedge.

Suzuki said recent comments by Dennis Gartman, author of The Gartman letter, was also providing gold with some support.

Gartman said gold was looking firmer on the Nigerian unrest as well as expectations that Asian central banks will likely be topping up the gold in their reserves in 2006 and 2007.

The benchmark December gold contract on the Tokyo Commodity Exchange finished the morning session at 2,136 per gram, up 1 yen from the previous day's close, after moving in a range of 2,129 yen to 2,149 yen.

Precious Metals prices by 0253 GMT.

Gold Prices

Last Net Change Pct Move

Gold 553.20 -0.70 -0.13

TOCOM Gold 2136.00 1.00 +0.05

Platinum 1022.50 -4.50 -0.44

Palladium 290.00 0.00 +0.00

Silver 9.58 0.02 +0.21

Change so far in 2006

Metal Latest bid End prev year Pct Move

Gold 553.20 517.20 +6.96

TOCOM Gold 2136.00 1973.00 +8.26

Platinum 1022.50 968.00 +5.63

Palladium 290.00 254.00 +14.17

Silver 9.58 8.81 +8.74


LINK: http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-02-22T061754Z_0...