LONDON: Gold prices cooled off after the previous week's rally in Europe on Monday, ticking slightly lower as the dollar strengthened modestly on gains in equities. The precious metal's direction would continue to be tethered to moves in the euro/dollar exchange rate, with a week of key U.S. data seen giving further clues as to whether a stuttering recovery in the world's leading economy was really taking place. Consumer confidence figures will be released on Tuesday, followed by second-quarter gross domestic product, the Institute for Supply Management's (ISM) manufacturing index and employment figures for July later in the week. Spot gold was at $361.75/362.50 by 1038 GMT, compared with New York's late quote on Friday at $362.45/363.15. Analysts said gold had a chance of adding to last week's gains, which saw the metal jump to its highest in nearly six weeks, although funds might be more restrained after their recent buying spree. "There is a good chance that gold will trade higher this week although recent increases in open interest are signalling that there may not be too much more than $370-75 in this current run up in the metal," UBS Investment Bank analyst John Reade said in a report. After clearing out some of their long positions at the start of the previous week, which helped trigger the rally in gold, investment funds subsequently rebuilt some of that by adding 1.4 million ounces to their net long positions in the week to July 22. Other analysts felt that further dollar weakness remained a strong possibility, which would bolster gold's standing as an alternative investment. They also said rising jewellery demand in the run-up to India's wedding season would be supportive. James Moore, analyst with TheBullionDesk.com, was slightly less positive and said gold would need to move higher over the coming days to avoid attracting further profit-taking. Gold's failure to break above $365 has sown doubt in traders' minds, he said.
SILVER STUCK
Having tried -- and failed -- to get back above $5.10 on Friday, silver briefly cracked that level on Monday on the back of light Asian buying. "But resistance between $5.10-$5.15 is likely to be solid and with the threat of institutional selling still overhanging the market, near-term gains are likely to be limited," Moore said. Spot silver was last at $5.09/5.11 an ounce, up from New York's $5.06/08. The metal scored a one-year high last week when it hit $5.15 on Thursday. However, analysts remained convinced that silver's fierce rally would be short-lived and said it was not justified by market fundamentals. "We do not see any fundamental reason for the recent strong performance of silver, with the only likely improvement in demand likely to come from India," Kamal Naqvi, precious metals analyst with Macquarie Investment Bank, said in a weekly report. "The catalyst for the move seemed in a very similar style to that of gold, propelled by the interest in commodities generally driven by the weaker US$ and rising bond yields." Angus Macmillan of Prudential Bache Securities said in his weekly report that a close below $5.00 could send silver back down to the $4.87/85 area. Platinum was little changed as it continued to battle with strong resistance in the $690/700 area. Spot traded at $692.00/696.00, modestly up from a previous $690.00/695.00. Palladium rose to $170.00/175.00 from $165.00/170.00. RELATED NEWS AND OTHER TOPICS Precious metals [GOL] All metals news [MTL] news Metals summary [GLANCE/MTL] Index of [GLANCE/] summaries All commodities [C] Metals diary [MTL/DIARY] news Ldn Bullion Mkt Foreign Assoc exchange rates SPEED GUIDES <>< ((Reporting by Clare Black, editing by Bernard Halloran; clare.black@.com; Messaging: For related news, double click on one of the following codes: [M] [E] [U] [CAN] [MTL] [MF] [UKI] [SF] [AUF] [RNP] [PTD] [DNP] [PMF] [EMK] [T] [C] [WEU] [GB] [EUROPE] [MUL] [MET] [GDM] [GOL] [LEN] [RTRS] [GOL/E] [GOL/] [XPT=\c] [XPD=\c] [XAU=\c] [XAG=\c] For related price quotes, double click on one of the following codes: Monday, 28 July 2003 11:01:32 RTRS [nN2W080879]