Gold prices rose to their highest in more than a week on Monday as recent declines attracted physical buyers and bargain hunters. Spot gold hit a session high of $659.05 a troy ounce, its highest since June 8, before edging down to $656.20/656.80 by 1505 GMT, against $654.50/656.00 in New York late on Friday.
"Given the potential for further dollar weakness, oil price strength and a tense geopolitical environment, gold prices should resume their upward trend in the medium term," Barclays Capital said in a note.
The dollar weakened against most major currencies on Monday. "Also crude oil as the second main driver is probably further well bid on supply concerns and would be another support for gold," Dresdner Kleinwort said in a daily report. Gold is generally seen as a hedge against oil-led inflation and often moves in the opposite direction to the dollar.
The metal has risen 2.5 percent since falling to a three-month low of $642.90 last Wednesday due to bargain-hunting and buying by jewellery makers at lower levels. Speculators cut their net long positions, or bullish bets, on US gold by 30 percent in the week to June 12 as the precious metal's benchmark futures contract on New York's COMEX market hit a three-month low, trade data showed on Friday.
PLATINUM UP: Platinum rose to $1,294 an ounce, its highest since June 8, from $1,278/1,282 late on Friday. It was last at $1,286/1,290. "Supply concerns have kept platinum firmly underpinned over the past two weeks," said James Moore, precious metals analyst at TheBullionDesk.com.
"That theme looks set to continue, with any further supply disruptions potentially triggering more price gains as the small supply surplus forecast for this year could be turned back into a deficit," he said. The world's biggest platinum producer Angloplat said it planned to suspend output at its largest unit, Rustenburg, for about seven days due to safety concerns.
The shutdown was expected to cut 2007 refined platinum production by 10,000-15,000 ounces. South Africa's National Union of Mineworkers last week declared a dispute with Impala Platinum over its reluctance to put a wage offer on the negotiating table.
Silver was at $13.27/13.31 an ounce after rising to $13.35, the highest since June 8, versus $13.21/13.25 late in New York on Friday. Palladium rose $1 to $370 an ounce, its highest since June 8. It was firm at $369/372 from $368/372 late on Friday.
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