Gold hits one-week highs on dlr, AngloGold talk

Gold hit a one-week high on Friday on a weaker dollar and firmer oil prices, while platinum hovered near record highs, analysts said.
Market talk that AngloGold Ashanti Ltd, the world’s third biggest gold producer, might partly close its hedge book also supported the market, analysts said.

Gold fell to $795.30 an ounce overnight before rising as high as $812.20. It was quoted at $811.05/811.75 by 1450 GMT, against $797.30/798.00 in New York on Thursday, when it hit a low of $793.20.
“We are seeing some investor year-end interest on the buy side. It obviously had an impact on the market because volumes are lower than usual. It’s a relatively thin market,” said David Holmes, director of precious metals sales at Dresdner Kleinwort.
He said talk that AngloGold might have been planning to close part of its hedging position was also a factor behind the upward price move.

A spokesman at AngloGold declined to comment on the talk.
AngloGold’s new Chief Executive Officer Mark Cutifani told Reuters last month that it was reviewing its operations with a view to disposing assets that do not add value, and also might ”lighten” its hedge book.

Gold also got some support from a weaker dollar and firmer oil in a thin market ahead of Christmas and year-end holidays.
The dollar fell against the euro as investors skimmed profits off a recent rally, but rose versus the yen on a report of a $5 billion capital infusion for U.S. brokerage giant Merrill Lynch.
Gold often moves in the opposite direction of the dollar and is generally seen as a hedge against oil-led inflation.

Oil held near $91 a barrel as falling inventories in top fuel consumer the United States.
Long-term sentiment remained positive and traders said gold and platinum had potential to scale new highs in the first quarter of the new year, with positive fundamentals and an expected decline in the dollar seen helping prices.
“With traders still tracking the dollar, and players caught between locking in profits for year-end and increasing their safe-haven holding on dips, the yellow metal looks set to remain in a volatile mood, spending more time in its current range between $785-812,” TheBullionDesk.com said in a report.
In other markets, the most active February contract in the U.S. futures market was up $11.9 at $815.10 an ounce.
“We expect to close the year around $800. Probably we will see some inflow again at the very beginning of the next year and see gold rallying in the first and the second quarters,” said Frederic Panizzutti, metals analyst at MKS Finance.

Platinum outlook bullish
Platinum traded near this week’s lifetime highs, underpinned by high lease rates and concerns over tight market conditions following a series of deadly mining accidents in South Africa, the world’s top producer.

Spot metal was up $3 at $1,515/1,520 an ounce.
“We are very bullish for platinum on the back of supply-demand issues. We have quite a big deficit, which may increase next year,” said Panizzutti.
Johnson Matthey, the world’s top platinum refiner and fabricator, said in November the market would change course in 2007 and see a deficit of 265,000 ounces. It had a surplus of 65,000 ounces in 2006 after seven successive years of deficits.
In market news, production of some 2,500 ounces of platinum group metals were lost during a strike at a mine owned jointly by Aquarius Platinum and Anglo Platinum, but partial output resumed on Friday.
Palladium was flat at $353/357 an ounce, while silver rose to $14.36/14.1 an ounce from $14.22/14.27. Source