November 03, 2007	Saturday	Shawwal 21, 1428

LONDON, Nov 2: Gold bounced back on Friday towards 28-year highs with speculators and investors betting on strong oil prices and a weakening dollar.

The metal, which has gained 25 per cent since the current rally started in mid-August, remained on track to breach the key technical level of $800 an ounce this year and move towards its all-time high of $850 next year, traders said.

The Federal Reserve cut rates by 25 basis points to 4.5 Per cent as expected on Wednesday, adding to a 50 basis point move in September.

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.

Oil rose over $93 a barrel as concerns over tight supplies heading into winter arrested a sharp overnight decline.

As far as the prognosis goes, there does not seem to be any reason for a change in scenario,” Wolfgang Wrzesniok-Rossbach, head of metals sales at Heraeus, said, adding there were positive fundamentals for bulls to be happy for the time being.

This does not mean that the market will remain void of periods of profit-taking. But as long as the metal stays above the technically and psychologically important mark of $700, the generally euphoric mood should not change, he said in a note.

In other markets, the key August 2008 gold contract on the Tokyo Commodity Exchange ended 46 yen per gram lower at 2,937 yen. But US gold futures gained, with the most active December contract up $1.3 at $794.90 an ounce.

A terminally ill-looking US dollar, geopolitical tensions and the onset of increased demand ahead of the northern hemisphere winter are all supportive for oil, Investec Australia said in a daily report.

In mining news, AngloGold Ashanti Ltd shut one of its larger mines in South Africa after a miner was killed in a rockfall as a miners strike to protest against the spate of mine deaths in the country loomed.

Platinum fell to $1,438/1,442 from $1,444/1,449 an ounce, palladium slipped to $367/371 from $369/373, but silver rose to $14.24/14.28 from $14.15/14.20 an ounce.—Reuters