Gold hits one-week high

Gold rose to its highest in more than a week on Monday on the back of a firm euro and strong crude oil prices, lifting futures contracts in Tokyo. Spot gold hit an intrude high of $656.50 an ounce before edging down to $656.20/656.80 an ounce, still higher than $654.50/656.00 late in New York on Friday.
A weaker yen also lifted the Japanese market, where the most active April 2008 contract on the Tokyo Commodity Exchange ended the session 32 yen per gram higher at 2,634 yen. Cash gold has risen as much as 2.1 percent since falling to a three-month low of $642.90 last on Wednesday, due to bargain hunting and purchases from jewellery makers at lower levels.
"I suspect that as it moves below the $650 an ounce level, there is a tendency to get some buying of gold to emerge," said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney. "My view is that gold is probably going to be trading in a fairly broad range in the near term," said Moore, referring to a band of $645 to $670 an ounce.
The euro was little changed at $1.3388, holding on to gains on Friday, when it rose 0.5 percent after US data showed core consumer inflation was lower than expected. The dollar was steady at 123.42 yen, holding near a 4-1/2 year high of 123.66 yen hit on EBS on Friday.
US crude futures rose on Monday after rising 5 percent last week on worries over supplies from Nigeria and the Middle East at a time of peak summer gasoline demand in the United States. Dealers expected volatile trade ahead for gold, with the market also watching energy markets for direction. Firm oil prices raise gold's appeal as an alternative investment.
"I don't know that investor's support for gold is so strong as this point as to push it significantly higher, say above the $670 an ounce level in the near term," said Moore of Commonwealth Bank of Australia. "Investor's support may not be as strong as it was earlier this year, but certainly it hasn't completely dissipated," he said.
Speculators cut their net long, or bullish bets, on US gold by 30 percent in the week to June 12 as the precious metal's benchmark futures contract in New York's Comex market hit a three-month low, trade data showed on Friday.
The chairman of the industry-funded World Gold Council, Pierre Lessened, said last week gold has already seen this year's low and prices should stabilise around $700 an ounce in the long term on a bearish outlook for the dollar.
"In the fall this year, we would probably see prices somewhere between $700 and $750. We might see a year or so where the price stabilises around the $700 mark," Pierre Lessened told Reuters late on Thursday.
Silver inched up to $13.26/13.30 an ounce from $13.21/13.25 late in New York. It hit an intrude high of $13.28 an ounce on Monday, its highest since June 8. Platinum was little changed at $1,278/1,283 an ounce. Palladium rose to its highest in nearly two weeks at $369 an ounce before slipping to $368/373 an ounce, steady from $368/372 in New York.