October 13, 2006	Friday	Ramazan 19, 1427

LONDON, Oct 12: Gold advanced on Thursday in a relatively quiet market, aided by bargain hunting and a weaker dollar, but was expected to struggle to make further gains, dealers said.

Gold's fate was seen tied up with movements in oil prices and the dollar in the near term and any sharp change might erase recent gains, they said.

Oil continues to be under pressure and technically looks weak. We think the trend is still probably downwards in gold, said a precious metals dealer in London. Spot gold touched a high of $576.50 an ounce before paring gains.

It was quoted at $575.30/576.30 against $572.60/573.60 in New York late on Wednesday.

The dollar slipped from this week's 2-1/2-month high against an index of currencies, trimming gains made after minutes from the Federal Reserve's last policy meeting dented expectations for an interest rate cut.

Gold prices generally move in the opposite direction of the dollar.

South African gold output rose 0.6 per cent in volume terms while overall minerals production increased 2.4 per cent in August compared with the same month the previous year, official data showed.

In other metals, platinum rose to $1,072/1,077 an ounce from $1,067/1,072, while palladium was up $1 at $305/309 in New York. —Reuters