March 7, 2006	Tuesday	Safar 6, 1427

LONDON, March 6: Gold advanced in Europe on Monday but lacked the momentum to breach recent peaks, with the market watching movements in oil and silver and the UN atomic watchdog’s meeting on Iran, dealers said.

The metal traded near February’s 25-year high of $574.60 an ounce, while silver eased after hitting a 22-year peak on Friday and awaited news on a proposed exchange-traded fund that had potential to attract fresh investment.

Spot gold rose to $568.15 before easing to $567.50/568.25 by 1046 GMT, compared with $564.90/565.80 late in New York on Friday, when it fell more than $3.

Gold is probably going to remain in a range-bound trade today and should find good support above $565 against an environment of high oil prices, said Yingxi Yu, analyst at Barclays Capital.

The IAEA report will be closely watched and has potential to help support prices further.

The International Atomic Energy Agency’s (IAEA) board of governors meets on Monday to weigh Iran’s nuclear activity, opening the way to possible U.N. Security Council action over suspicions Iran wants to make atom bombs.

The agency will submit a report to the 35-nation meeting saying Iran has largely ignored a resolution demanding that it take steps to defuse a crisis of confidence in its nuclear programme.

Gold generally rises on geo-political tensions and is seen as a hedge against inflation.

Oil prices inched down on Monday after a four-day rally that had pushed prices to a new one-month high.

SILVER MARKET NERVOUS: Dealers said any significant gains by silver might spark further buying of gold, but that the silver market remained nervous.

Technically it is near overbought conditions and might react adversely to any negative news.

However the trend remains firm in the medium term, Standard Bank said in a report.

Spot silver was quoted at $10.20/10.23 an ounce, against $10.19/10.22 in New York when speculation that US regulators would soon approve a silver-backed exchange-traded fund pushed up the price to $10.31 an ounce.

Platinum fell to $1,052/1,056 an ounce from $1,057/1,061 in New York, while palladium was flat at $300/304.—Reuters