way eh and up she rises

UPDATE 1-Gold hits 2-week high, still shy of $600
Tue Oct 17, 2006 4:47 AM BST
Email This Article | Print This Article | RSS [-] Text [+] (Updates prices)

By Lewa Pardomuan

SINGAPORE, Oct 17 (Reuters) - Gold rose to its highest in two weeks above $597 an ounce on firmer crude oil prices, but it struggled to crack key technical resistance at $600 an ounce.

Dealers shrugged off news that North Korea might be getting ready for another nuclear test but other precious metals tracked gold's gains. Platinum hit its highest in nearly two weeks while silver rose to a five-week high.


Spot gold hit a high of $597.50 an ounce and was quoted $597.10/598.10 by 0310 GMT, higher than $595.20/596.20 late in New York on Monday.

"Gold now has the psychologically important $600 level firmly in its sights and needs to test this level in the coming days or risk breaking back down through $590," said Investec Australia in a daily report.

"Having risen almost $20 over the past two trading days, there is evidence that investors are being attracted back to the metal," said Investec.

U.S. crude oil futures rose for a fourth session on Tuesday to hover above $60 a barrel ahead of an emergency OPEC meeting on Thursday to work out an agreement to cut crude output.Investec said gold could gain further momentum if it breached $605, which the broker believes is a significant technical level given the long-term descent from gold's multi-year high of $730 hit in May.

A dealer in Singapore attributed gold's gains to a rally in base metals.

"I think it's driven more by tin and nickel taking base metals higher. Gold is rising with it," said the dealer, adding that another rally in base metals could help bullion regain $600.

On electronic trading platform Select, three-month London Metal Exchange tin jumped $1,185 to a record $10,975 a tonne on Monday, triggered by concerns that a clampdown on smelters operating without proper permits in Indonesia would cut supplies.


Nickel and lead also hit contract highs in London trading.

On the geopolitical front, U.S. spy satellites have detected suspicious vehicle and people activity near the site of North Korea's nuclear test that may signal preparations for another test, U.S. television networks reported on Monday.

In Seoul, a South Korean government official told Reuters on Tuesday: "The government is aware of signs related to North Korea's possible second nuclear test. We cannot exclude the possibility of a second test."

News that North Korea had conducted a nuclear test last week helped push up the gold price.

Platinum rose to $1,091/1,096 an ounce, from $1,083/1,088 late in New York.

Palladium matched a near five-week high of $322 an ounce hit on Monday. The metal was last quoted at $320/325 in New York.

Silver hit a five-week high of $11.87 an ounce, up from $11.81/11.88 late in New York. ($1=119.09 yen)