April 4, 2003	Friday	Safar 1, 1424

LONDON, April 3: Gold prices dropped to their lowest in nearly four months in Europe on Thursday as US troops continued towards Baghdad.

Gold has lost some $15 as the dollar and equities have risen on the US-led advance, which has raised the prospect of an early end to the conflict.

“Continued belief that the war in Iraq will be over very quickly is keeping the yellow metal under pressure and as a result we start to find the true value of gold,” said James Moore, analyst with TheBullionDesk.com.

Gold crept back up towards the end of the European session, to end at $325.55/326.25 an ounce by 1515 GMT, having moved away from a near four-month low of $323.50. That was still well down on New York’s close on Wednesday at $329.70/ 330.20.

Gold was “set” or fixed at $323.70 an ounce in the London afternoon fixing session, off the morning fix of $324.70 and the lowest since December 10, 2002.

Kevin Crisp of Dresdner Kleinwort Wasserstein said: “It is all Iraq, all very short term. The news washes across the markets and hits gold at some point.”

Traders said gold had been hit by selling as investors pulled money out of traditional safe havens and moved back into currency and stock markets.

But the drop below $325, which was the lower end of gold’s trading band over the past four months, stoked physical interest and producer buy-backs.

HSBC analyst Merlin Marr-Johnson said in his daily report that an estimated 15,000 ounces was bought from HSBC offices in the Middle East and India on Wednesday as buyers sought to profit from sharply lower prices.

Hillyard said that although gold, like base metals such as aluminium, was seeing buying interest as prices fell, both markets were being overwhelmed by selling.—Reuters