| Greenspan lets dollar slide raises gold Original Source Link: (May no longer be active) http://www.forbes.com/markets/bonds/newswire/2004/02/12/rtr1258402.htmlhttp://www.forbes.com/markets/bonds/newswire/2004/02/12/rtr1258402.html
Early NY gold rises to 15-day high as dollar struggles Reuters, 02.12.04, 10:20 AM ET
NEW YORK, Feb 12 (Reuters) - COMEX gold rose to a 15-day high Thursday morning, basking in suggestions by Federal Reserve Chairman Alan Greenspan that the Fed can take time before tightening monetary policy and the dollar's slide was not a bad thing.
The market saw Greenspan's remarks before a House committee Wednesday as a green light to continue the dollar disinvestment that helped carry gold up a 15-year peak at the start of the year.
At 10:10 a.m. EST (1510 GMT), April gold <0#GC:> was up $2.10 at $412.80 an ounce, trading from $410.30 to $414.20, its highest since Jan. 28. On Wednesday, it rose $3.70 after Greenspan spoke.
"Greenspan obviously turned everything around yesterday, once he started giving the impression that rates will remain the same," said a floor broker.
The euro overnight rose to $1.2846 which was half a cent from last month's lifetime high of $1.2898. That made gold a more affordable alternative for European investors exiting the greenback.
The Fed chief will repeat his prepared speech to U.S. Senators on Thursday. In the first part of his two-day semiannual report on monetary policy, he said the weak dollar could help narrow the yawning U.S. current account deficit.
Though there was no rush to raise interest rates, because inflation remains tame, he said short-term rates could not stay at 45-year lows indefinitely, with the economy now expanding vigorously.
Gold hit a 15-year high on Jan 6 at $432.30 as the euro rallied to record highs. The safe-haven metal subsequently consolidated on profit-taking by speculative funds that pushed it down to $395 10 days ago.
An extra support, according to traders, was a strike affecting three South African mines of Harmony Gold , the world's No. 5 producer. But Harmony said the stoppage affected only 5 percent of its output, about 700 ounces per day.
A second COMEX broker said technical indicators were pointing to further gains for gold.
"The stochastics started turning a little more bullish. So I think we're ready to go again," he said. "We had our washout, so let's see if this thing moves."
The broker continued, "Between yesterday and today we had some new funds coming in here covering this thing, buying. It held above $410-$409. I look for $415 to $425."
Spot gold was at $412.05/75, up from $411.25/2.00 late Wednesday. London's afternoon fix was $411.60.
COMEX March silver <0#SI:> was up 0.7 cent at $6.565 an ounce, calming after followed gold up 17.0 cents on Wednesday. The morning range was $6.505 to $6.62. Spot silver rose to $6.55/57 from $6.53/55. It fixed at $6.54 in London.
NYMEX April platinum <0#PL:> gained $2.80 to $845.50 an ounce. Spot touched $847.00/852.00.
March palladium <0#PA:> was $2.65 higher at $244.00 an ounce. Spot traded at $239.00/244.00.
Copyright 2004, Reuters News Service
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