July 27, 2007	Friday	Rajab 11, 1428

LONDON, July 26: Gold prices recovered a little on Thursday after falling to a one-week low, and analysts said the metal could gain further on a bullish outlook.

Spot gold rose as high as $676.60 an ounce and was at $675.45/676.05 against $674.40/675.20 late in New York on Wednesday when it dropped to as low as $670.50.

I'm still bullish on the market despite the actions from yesterday. We expect to see some consolidation at these levels and should gold hold at current levels, I expect that we will push higher, said a precious metals analyst in London.

We're not going to see one clear upward trend. We push higher, fall back, consolidate for a while, and push higher once again, she said, adding a lot of long trading position holders had left the US futures market which should support gold.

Dealers kept an eye on the dollar that steadied, holding on to gains made the previous day during a sharp technical rebound from 15-year troughs against a basket of major currencies and this week's record low versus the euro.

The greenback has suffered in recent weeks as investors fret that troubles in the US subprime mortgage market -- catering to borrowers with a poor credit history -- could spill over into slower economic growth and lead to interest rate cuts.

A weaker dollar makes gold cheaper for other currency holders and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.

US crude oil surged more than $1 to $77 a barrel, its highest level in almost a year, on increasing demand from refiners in the world's top consumer.

Direction in the coming session will largely depend on the dollar with tomorrow's GDP reading potentially proving pivotal, James Moore, precious metals analyst said in a daily research note.

Calyon Corporate and Investment Bank said the platinum market had been extremely tight during the past few years. Given high prices, producers had raised capacity at existing operations or brought new sites online.

Silver edged up to $13.12/13.17 an ounce from $13.08/13.13 in New York, but palladium was unchanged at $364/367 an ounce.—Reuters