Monday, 14th August 2006 (3132 views)

A truce between Israel and Lebanese militant group Hezbollah in the Middle East has caused the price of gold to fall slightly on the stock market.

The precious metal's price fell below $625 an ounce for the first time in several weeks as buyers began to abandon their gold stocks.

With political tensions alleviated slightly due to the United Nations' truce, which ended five weeks of conflict, gold lost some value in trading in New York, London, and other key markets across the globe.

Market analysts in London predicted that the gold price would not dip too sharply however.

"I can see it drifting, maybe down towards $620," one London trader told Reuters.

"Hopefully there should be some support around the $620s, if not then at around $615," he continued. "I would be surprised if it actually gets down that far. I think people will buy the dips again."

Although the UN truce has been largely adhered to since hostilities ended on Monday (August 14th), the situation remains volatile and observers suggested that even the slightest murmur of trouble could send gold prices back up once more.

 

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