Gold, Platinum Ease on Profit-Taking

Source: Thomson Financial  (10/12/07)

"Gold and the precious metals continue to benefit from a combination of bullish factors, including persistent US dollar declines, high oil prices, a resurgence in credit market worries and strong fund and other speculative purchases," said James Steel, an analyst at HSBC.

Gold and platinum eased a touch as investors took profits after both metals reached fresh highs in late trade yesterday, with ongoing weakness in the US dollar sparking further fund buying.

The US currency, which has rallied a touch in the course of the last week, is currently languishing near record lows against the euro, encouraging further buying of the precious metals.

Gold is seen as an alternative investment to the US currency and typically moves in an inverse relationship to it. Weakness in the dollar, in which the precious metals are denominated, also makes gold and platinum cheaper for holders of other currencies.

"Gold and the precious metals continue to benefit from a combination of bullish factors, including persistent US dollar declines, high oil prices, a resurgence in credit market worries and strong fund and other speculative purchases," said James Steel, an analyst at HSBC.

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