Gold is expected to increase go past $600 this week....OXR is...

Gold is expected to increase go past $600 this week....OXR is the best stock on the market to capitalised. It is unhedged, and any price increase lower dollar is to OXR's advantage....

Gold May Gain for 5th Week on Commodity Rally, Dollar Concern, Survey Says
April 10 (Bloomberg) -- Gold may rise for a fifth straight week, extending a rally above $600 an ounce, as investors drive up all commodities prices and seek alternatives to dollar- denominated investments, a Bloomberg News survey shows.

Eighteen of 28 traders, investors and analysts surveyed from Sydney to Chicago on April 6 and April 7 advised buying gold, which rose $6 to $592.70 an ounce last week in New York. Seven advised selling. Three were neutral. Gold is up 38 percent in the past year, reaching a 25-year high of $603.10 last week.

Gold's $100 gain since November signals accelerating inflation, some analysts said. The precious metal surged to a record $873 in January 1980, six months before U.S. consumer prices soared by an annual rate of almost 14 percent, the highest ever. Gold has climbed in all major currencies this year, paced by a 15 percent gain in yen and 12 percent in euros.

``Gold above $600 is frightening,'' said Felix Rohatyn, an investment banker and the former U.S. ambassador to France. ``It appears that people expect inflation, and that people don't have trust in our currency.''

The dollar has fallen 2.1 percent this year versus the euro to $1.2092 and gained 0.5 percent against the yen. Consumer prices were up 3.6 percent for the 12 months ended in February, compared with a 4 percent year-over-year gain the previous month, according to the U.S. Labor Department. The rate bottomed at 1.1 percent in June 2002.

Metals Prices

The 1 percent gain in gold last week on the Comex division of the New York Mercantile Exchange was predicted by a majority of analysts surveyed March 30 and March 31. The Bloomberg survey has forecast the direction of prices accurately in 62 of 102 weeks, or 61 percent of the time.

Rising prices of copper, zinc and other base metals, along with higher energy costs, continued to feed concern that inflation is accelerating, analysts said. Copper and zinc soared to records last week, and crude oil reached $69.20 a barrel, about 2 percent below its record of $70.85 on Aug. 30.

Concerns about the spread of avian influenza, Iran's nuclear program, and labor riots in France have drawn investors to gold, often viewed as a haven for investors in times of turmoil.

``Geopolitical risks could be spurring a move out of yen, euros and dollars and into gold, but it may still have inflationary implications,'' said Michael Darda, chief economist at MKM Partners in Greenwich, Connecticut.

Worldwide interest rates are still too low to contain inflation, Darda said. U.S. Treasuries of all maturities have generated a loss of 1.2 percent this year, according to Merrill Lynch & Co. data, the worst start to a year since 1996.

Shunning Dollars

``People around the world are simply avoiding currencies and moving into gold,'' said Dennis Gartman, editor of the Suffolk, Virginia-based Gartman Letter. ``They're shunning debt, and they're shunning dollars and euros and yen. They're buying assets and tangibility.''

Gartman correctly predicted last year that gold would rise even as the dollar gained against the euro.

Gold gained 13 percent in the first quarter, compared with a 1 percent loss for corporate bonds.

``It looks like big Wall Street players are rolling out of bonds into gold,'' said Ralph Preston, an analyst at Heritage West Futures in San Diego. ``As bonds continue to sell off, gold should continue to shine.''

Gold's climb to $600 prompted some analysts to revise annual forecasts for average prices. Barnard Jacobs Mellet LLC raised its projection to $552 from $510. Gold probably will fall this quarter and rebound in the second half, the company said.

Speculators

``The longer prices stay up this high in April, the less likely our scenario is and we may have to increase our forecast,'' said Barnard Jacobs Mellet analyst Patrick Chidley.

Hedge-fund managers and other large speculators increased their net-long position in Comex gold futures in the week ended April 4, U.S. Commodity Futures Trading Commission data showed.

Speculative long positions, or bets prices will rise, outnumbered short positions by 132,208 contracts, the Washington- based commission said in its Commitments of Traders report on April 7. That was the highest since Jan. 31 and the third straight weekly gain. Net-long positions rose by 11,622 contracts, or 10 percent, from a week earlier.

Speculative interest in gold may result in a bubble similar to the rise in technology stocks in the 1990s, some analysts said.

``This market is approaching a short-term top, and speculators may have overextended themselves on buying with this move,'' said John Person, an analyst at NationalFutures.com in Palm Beach.