Gold moves higher as weaker dollar spurs buying

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Gold drifted higher on Friday on a weaker dollar and dealers said the market was expected to be choppy (with many short rough irregular waves) in thin trading conditions during a U.S. holiday.

Gold was helped by the euro, which shot above $1.30 for the first time since April last year, extending sharp gains made this week after upbeat German data reinforced expectations the European Central Bank would raise interest rates into next year.

Dealers said the metals were vulnerable to wider price fluctuations because of lower numbers of players in the market.

New York commodities and energy markets will remain closed on Friday for the Thanksgiving holiday.

Pressure on the dollar will be a key factor in boosting gold prices in the coming sessions.

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Gold futures rallied Friday as the dollar tumbled to a one-and-a-half year low against the euro and an almost two year low against the British pound on concerns about flagging economic growth in the U.S.

Gold for December delivery was up $11 at $640 an ounce in electronic trading. The New York Mercantile Exchange is closed for trading Friday, leaving the electronic Chicago Board of Trade contract as only way to trade the precious metal.

It's the first time the CBOT contract has been open while Nymex is closed.

On Wednesday, an early rally in gold lost steam heading into the close of trading. The contract ended up just 30 cents at $629 an ounce, well below an intraday high of $635. Trading was closed Thursday for the Thanksgiving holiday.

Early Friday, the euro broke through the $1.30 level for the first time since April 2005 and peaked above $1.31 as a sharp selloff of the dollar continued. The dollar fell to as low as 115.61 yen from 116.27 yen late Thursday. The British pound rose to as high as $1.9351 from $1.9156 late Thursday, its best level since December 2004.

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Asia / Europe Spot Price
                                    MARKET IS OPEN
                           Will close in 2 hours 11 minutes
   ----------------------------------------------------------------------
   Metals                      Bid          Ask      Change from NY close
   ----------------------------------------------------------------------
   Gold                     638.40       639.90        +9.80      +1.56 %
   Silver                    13.39        13.46        +0.38      +2.92 %
   Platinum                1192.00      1198.00       +47.00      +4.10 %
   Palladium                332.00       338.00       +10.00      +3.11 %
   ----------------------------------------------------------------------
   Last Update on Nov 24, 2006 at 11:19.40

kellylei

THX

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Asia / Europe Spot Price
                                   MARKET IS CLOSED
                           Will open in 38 hours 33 minutes
   ----------------------------------------------------------------------
   Metals                      Bid          Ask      Change from NY close
   ----------------------------------------------------------------------
   Gold                     637.90       639.40        +9.30      +1.48 %
   Silver                    13.40        13.50        +0.39      +3.00 %
   Platinum                1192.00      1198.00       +47.00      +4.10 %
   Palladium                331.00       336.00        +9.00      +2.80 %
   ----------------------------------------------------------------------
   Last Update on Nov 24, 2006 at 13:28.17 NY Time