LONDON, Nov 17 - Gold players in Europe believe it is only a matter of time before the resurgent metal touches $400 an ounce, a level not seen since March 1996, but the magic number eluded their grasp so far on Monday after another failed assault in Asian trading. In other metals, silver benefited from gold's rush higher, trading at its highest in over three years. Spot bullion got to within a hair's breath of the $400 marker in Asian trade at $399.50 an ounce -- another 7-1/2 year peak -- as fund buyers came into the market again, bolstered by a weakening dollar and persistent geo-political tension exacerbated by bombings in Turkey at the weekend. A weaker dollar makes gold less expensive for holders of other currencies like the euro, while geopolitical problems highlight the metal's status as a safe-haven investment. European dealers said that the market could see $400 later on Monday, but were disappointed so far with bullion's lack of reaction to weakness in the dollar.
"I guess we will see $400 in the short term -- perhaps today, but I am a bit disappointed with (the) EUR/USD already higher and gold rather lacklustre right now," one dealer said. "With the current market, it could be that we have to wait for the New York opening," he added. By 1121 GMT, spot gold was trading at $397.70/398.20, compared with at $397.25/398.00 quoted in New York late on Friday. The spot reference price was fixed in London on Monday morning at $398.00. The dollar fell to three-week lows against the euro on heightened geopolitical worries stemming from Saturday's suicide bombings on two Istanbul synagogues. The euro was quoted at $1.1819/21 against the dollar, after hitting a high of $1.1848 earlier. London-based Arab-language newspaper al-Quds al-Arabi said militant group al Qaeda claimed responsibility and was planning car bombings against the United States, Britain, Italy, Australia and Japan.
FUNDS STILL LONG ON GOLD
Commitment of Traders data released on Friday showed that fund buyers still retained a high number of long positions in the U.S. COMEX futures market, despite a slight fall. Net speculative long positions in COMEX gold fell to 82,578 contracts as of Nov. 11 from 84,610 contracts on Nov 4. Non-reportable net long positions went up to 40,625 contracts from 39,385 contracts. Open interest climbed to 270,895 from 262,696 lots on November 4, the CFTC DATA showed. "The average fund position at present (849 contracts) is actually now slightly below the ten-year norm (870) suggesting that the funds remain cautious about the prospect for either further prices increases or a sharp near-term correction," Sempra Metals economist John Kemp said in a report on the data. Spot silver was quoted at $5.39/5.41 an ounce, its highest since February 2000. The metal was last quoted at $5.38/5.40 in New York on Friday. Palladium was trading at 193.00/198.00, from 196.50/202.50.
Platinum stood at $763.00/768.00 compared with $768.50/773.50 late in New York on Friday due to profit-taking ahead of the release of Johnson Matthey 's platinum/palladium outlook this week. The market was also waiting for more news from Anglo American Platinum (Angloplat) after the world's biggest platinum producer said on Friday it would probably release an update on its expansion plans in the last week of November. Fears of a cutback in the firm's production have underpinned the platinum market in recent weeks, pushing prices to their highest levels in 23 years. Angloplat is majority owned by mining giant Anglo American .//www..com