Thursday, 20th January 2005 (2868 views)

Gold traded around $422 an ounce in Asia yesterday, the Reuters news agency reports.

However, with the dollar maintaining a two month high against the euro that price could slip.

Physical demand also subsided, which could suggest that investors and jewellers are waiting for prices to fall below $420 an ounce.

One Singapore based dealer told Reuters: "I think physical guys will show up again at the $415 to $410 ounce range.

"The market was well supported at around $420 but now physical guys are wondering whether they can buy gold at slightly cheaper prices."

Analysts believe the US Federal Reserve will raise interest rates one quarter of one per cent at its meetings in February and March, which will increase demand for the dollar and thus reduce the attractiveness of gold to investors.

 

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