Gold nearly hits 17-year high

Gold futures in New York edged higher Monday on technical buying but slipped from a nine-month overnight high as traders took profits and gauged currencies, according to media reports.

The yellow metal was gaining strength, analysts reportedly said, lifted by good demand but pressured lower by a stronger dollar and lower oil prices.

Lower crude prompts investors to withdraw from gold because, which serves as a safe haven from inflation, Reuters reports. A firmer dollar makes dollar-priced gold more expensive for holders of other currencies.

December delivery gold on the New York Mercantile Exchange’s COMEX division settled at $453.70 an ounce, up 70 cents on Monday. It traded between $455.80 and $451.20.

Spot gold was quoted at $449.60/450.30 by 2:35 p.m., up slightly from late Friday in New York at $448.90/449.60.

The U.S. notched solid gains on a less bearish outlook for the economy following Hurricane Katrina.

But an election victory by Japanese Prime Minister Junichiro Koizumi pushed up the yen against the dollar and boosted the interest of Japanese investors in dollar-priced bullion, dealers reportedly said.

Euro-denominated gold hit its firmest in three weeks as the European currency softened on growing uncertainty over an upcoming vote in Germany. The euro changed hands at around $1.2278.

Some dealers said gold was gaining strength and was likely to climb past the December peak of $456.75, Reuters reports. Anything above that would take gold to its highest since June 1988.

The yellow metal set the afternoon fix at $448.35.

In silver, December futures eased 0.5 cents to $7.06 an ounce, dealing from $7.14 to $7.01. Spot silver changed hands at $7.04/7.06, up from a late quote of $7.00/7.03, previously. It fixed at $6.975.

The fund net long position in COMEX silver rose to 14,566 lots on Sept. 6, from 11,650 contracts.

October platinum ended at $915.9 an ounce, down 50 cents. Spot platinum closed at $905.50/907.50 down from $911/914 late Friday in New York.

December palladium finished down $1.15 to $185.25 Spot eased to $182/184.


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