as good as it gets for gold *****, page-5

from bloomberg 3 jan. 06 Gold Rises Amid Investor Gain Expectations, Jeweler Demands
Jan. 3 (Bloomberg) --

Gold rose as investors and speculators bought the precious metal on expectations price gains will extend into this year and on demand from Asian jewelers.

The precious metal last year had its fifth annual increase in 2005 after reaching a 24-year high of $541 an ounce on Dec. 12 as investors diversified from stocks, bonds and currencies amid concern inflation may rise crimp returns. Jewelry demand is ``at its highest ever,'' the World Gold Council said Dec. 8.

``The expectations among investors is to hold gold as it will go higher,'' said Gavin Wendt, a resources analyst at Fat Prophets Fund Management in Sydney, who predicts gold may reach $600 an ounce by mid-year. Consumer demand may increase in India when farmers cash in their crops and buy the bullion, he said.

Gold for immediate delivery rose as much as $6.91, or 1.4 percent, to $518.90 an ounce, and traded at $518.86 at 12:47 p.m. Sydney time.

Commodity prices, led by energy and metals, reached a 25- year high in early September as pension funds, hedge funds and investors poured more money into raw materials. The Reuters- Jefferies CRB Index of 19 commodities gained 17 percent in 2005, and the energy-weighted Goldman Sachs Commodity Index gained 39 percent.

Gold for delivery in February rose as much as $1.50, or 0.3 percent, to $520.40 an ounce in after-hours trading on the Comex division of the New York Mercantile Exchange. It traded at $519.50 at 11:44 a.m. Singapore time.

A futures contract is an obligation to sell or buy a commodity at a set price by a specific date.