December 16, 2006	Saturday	Ziqa'ad 24, 1427

LONDON, Dec 15: Gold inched down on Friday after trading in a tight band, with the dollar remaining the main potential trigger to move the market, analysts said.

The only prevailing factor these days is definitely the dollar strength or weakness. Gold is trading in a range, attracting only little interest, said Frederic Panizzutti, analyst at MKS Finance.

We still see some potential for a move higher over the coming few days as we move towards the end of the year. Probably we could see some more weakness in the dollar, he added.

Spot gold rose as high as $628.20 an ounce, hit a low of $624.60 and was at $625.10/626.60 by 1055 GMT, compared with $626.00/627.50 late in New York on Thursday.

Gold has fallen steadily since rallying to a 16-week high of $649.50 on Dec. 1 as players locked in profits ahead of the Christmas and New Year holidays. The metal was trading well below the 26-year high of $730 an ounce hit in mid-May.

The dollar held in a tight range against the euro ahead of US November inflation figures at 1330 GMT. The US currency rose on Thursday after strong jobless data strengthened the view the Federal Reserve may not have to cut interest rates.

Gold often moves in the opposite direction of the dollar.

The metal also generally is seen as a hedge against inflation.

While the mid- to longer-term outlook for gold remains bullish due to increasing investor interest and speculation of institutional dollar diversification, the market short-term is still at risk to pockets of long liquidation ahead of year end, TheBullionDesk.com said in a daily report.

The physical sector saw light buying at lower levels in the past few days, which helped push up premiums for gold bars to 30 US cents an ounce to the spot London price in Hong Kong from 10 cents last week.

Volatile gold prices in November resulted in a 5.7 per cent drop in jewellery exports by Turkey, a leading bullion market, to 9.5 tons from a year earlier.

January-November exports fell 24 per cent to 77.11 tons.

In other precious metals, platinum dropped to$1,104/1,109 an ounce from $1,108/1,118 late in New York, while silver edged down to $13.73/13.80 from $13.76/13.83.

Palladium was down $2 at $324/328 an ounce.—Reuters