October 03, 2007	Wednesday	Ramazan 20, 1428

LONDON, Oct 2: Gold prices fell more than 2 per cent on Tuesday as a dollar rise prompted investors to take profits from the metal’s 28-year high, but analysts said the upward trend remained intact.

Platinum also lost steam after a fund-driven rally, with prices falling more than 3 per cent after rising up to $1,391 an ounce on Monday, just $4 away from an all-time high.

Spot gold dropped to $731.20 before recovering to$734.35/735.05 an ounce against $746.80/747.60 in New York late on Monday, when it rose up to $747.65 -- the highest since January 1980.

The dollar has strengthened marginally and it’s an illustration to me of how dependent on the dollar this bull market is, said Stephen Briggs, economist at SG Corporate and Investment Banking.

It was obviously going to be vulnerable to something like this because we haven’t really had a correction in gold on the way up. You can go down a lot further without seriously damaging the trend that we (have) had in place for several weeks now.

Gold has jumped 17 per cent, or over $100, since falling to $641.10 in mid-August.

For gold, I think we need to be careful because we haven’t really seen a sell-off in the past 20 trading sessions, said a dealer in Singapore.

Bullion’s upside target was pegged at $750 an ounce but some dealers expected a technical correction, with $726, a level last seen in mid-September, providing crucial support.

A break below that level was likely to spur more selling, they said.

In other bullion markets, benchmark August futures in Tokyo ended 25 yen per gram lower at 2,761, having reached an intraday high of 2,804 yen -- the highest for any benchmark since April 1985.

US futures also fell, with the most active December contract falling $13.8 to $740 an ounce.

Platinum fell to $1,347 an ounce before rising to $1,352.50/1,356.50, against $1,390.70/1,397.70 in New York.

The most active platinum contract in Tokyo, currently August 2008, tumbled and ended by the 100-yen daily limit at 4,978 yen a gram on technical selling and weakness in the spot market.

Spot palladium dipped to $350/353 an ounce from $354.80/358.80.

Silver hit a high of $13.71 on Tuesday but then tumbled to $13.29/13.34 an ounce, against $13.71/13.76 late in New York.—Reuters