August 11, 2006	Friday	Rajab 15, 1427

LONDON, Aug 10: Gold reversed track to fall on Thursday after gaining on news British police had thwarted a plot to blow up aircraft crossing the Atlantic. Prices fell as investors took their profits, while a drop in oil prices and a marginal rise in the dollar against the euro also put pressure on gold, which is generally seen as a safe-haven investment.

Spot gold hit a high of $653.75 an ounce before falling as low as $641.90. It was quoted at $644.80/645.55 by 1341 GMT, down from $649.50/651.00 in New York late on Wednesday.

“Initially, for half an hour, the airline news was an issue for the gold market but it didn’t help too much,” said Michael Blumenroth, trader at Deutsche Bank.

Dealers said gold was expected to trade in a range of $635 to $670 in the next few days, with the Middle East conflict and firm oil prices elevating the metal’s safe-haven appeal.

“Gold ... will continue edging higher as the prospect of flat US rates, high fuel costs, ongoing unrest in the Middle East and Iran and North Korea's nuclear development programmes drive investors back towards gold,” TheBullionDesk.com said.

In industry news, South African gold output fell 9.5 per cent in volume terms while overall minerals production declined 1.2pc in June compared with the same month the previous year, official data showed.—Reuters