Metals - Gold edges up as dollar weakens slightly, equity mkts recover

Metals - Gold edges up as dollar weakens slightly, equity mkts recover

	Published : Tue, 23 Oct 2007 09:22 By : Agencies Print this Story

LONDON (Thomson Financial) - Gold edged up as the dollar weakened slightly after rebounding strongly yesterday, and as risk aversion receded somewhat following a recovery in US equities overnight.

The US recovery helped ease growing concerns about the subprime mortgage crisis and its potential to slow US growth, and also led to a rebound in European and Asian stock markets today.

'The crucial question concerning the recovery of gold is how long the reversal in equity markets will last,' said Dresdner Bank analyst Peter Fertig.

'Gold is likely to continue the rebound if equity markets post further gains. However, in the case that recession fears regain dominance, gold would likely fall in line with stock markets.'

At 9.25 am, spot gold was up at 756.95 usd an ounce against 755.60 usd in late New York trades yesterday, when it fell more than 1 pct on losses in global equity markets, a recovering dollar and weaker crude oil prices.

Last week, gold rose to a 28 year high of 770.90 usd an ounce.

Analysts said the recovery in the world's stock markets today has helped the euro claw back recent losses against the dollar, as returning risk appetite stems the flight to safe haven currencies like the dollar.

Gold often trades opposite to the dollar as it is seen as an alternative asset to the US currency. Also, a weak dollar makes gold, which is traded in dollars, cheaper for holders of other currencies.

In other precious metals, platinum, which touched an all-time high of 1,457.50 usd an ounce last week, was up at 1,439 usd against 1,432 usd in late New York trades yesterday.

Its sister metal palladium was trading down at 358 usd an ounce against 362 usd, while silver was up at 13.51 usd against 13.46 usd.

maytaal.angel@thomson.com

ma/lam

The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.