Gold council said to plan interest-bearing gold accounts in Middle East

a href=http://www.reuters.com/newsArticle.jhtml?type=topNewsamp;storyID=3918977...

NEW YORK, Dec. 1 (Reuters) -- COMEX gold closed north of
$400 an ounce for the first time in almost eight years Monday,
as New York uncorked four days of pent-up demand and the
sliding dollar made the safe-haven metal more affordable
overseas.

Benchmark February gold rose to $404 an ounce, the highest
benchmark price since February 1996, as the euro rose to a
lifetime high against the dollar. Silver rose above $5.50
an ounce for the first time in 3-1/2 years.

The active gold contract settled at $403.80, up $5.80 from the
close on Wednesday before the U.S. Thanksgiving weekend.
The overnight low was $397.80 an ounce.

It is up 14 percent for 2003, or $51 from last year's $353 close.
Even with Wall Street starting December on an upbeat note,
investors looked to gold as portfolio insurance, especially with
the specter of quagmire in Iraq, where attacks have mounted
on U.S. and allied soldiers, as well as civilians helping rebuild
the war-ravaged country.

Gold failed twice in recent sessions to dig in above $400 an
ounce, as speculators took profits and rolled long positions
before the December contract went into delivery last week.

But bulls were betting on the euro's break above $1.20, which
came Friday when New York was closed. They said the
technical picture looked very good now that futures have
closed above the long-time psychological level.

quot;This market is unforgiving. It lets you out and doesn't let
you back in so easily,quot; said Robert Gottlieb, head of
bullion dealing at HSBC. quot;The market held and we're
reinitiating some positions. Clearly, the euro over $1.20
was a help at the beginning.quot;

Spot gold rose to $402.25/3.00 from the last New York
close at $396.25/7.00. London's afternoon fix was at
$400.25.

Gold dipped briefly when the dollar steadied on reports
from the Institute of Supply Management showing U.S.
factories working at their fastest clip in 20 years in
November, while October construction spending rose 0.9
percent to a record.

The Dow Jones industrial average was up 88 points in the
afternoon.

Mining stocks were positively on fire. Newmont Mining
and AngloGold soared and the Philadelphia XAU Index of
gold and silver mining shares hit a 6-1/2 year high.

quot;Speaking of broadening bullishness, we note new secular
bull market highs in a broad number of bullion shares,quot; wrote
analyst Gregory Weldon, publisher of Metal Monitor. quot;We are
bullish on the whole of the precious metals sector.quot;

Strong economic indicators helped silver, which has the
double advantage of being an industrial material and a
precious metal tethered to gold. March silver closed up
8.8 cents at $5.47 an ounce. It hit $5.57, its highest since
mid-2000, from a low of $5.38.

Spot silver was last quoted $5.44/46, up from $5.34/36
late Wednesday. Monday's fix was at $5.36.

quot;Silver is the mover today, it's really off to the races,quot; said
a bullion trader. quot;Platinum is not looking too shabby either.
But it's all dollar-related.quot;

At the NYMEX, January platinum rose $6.10 to $774 an
ounce. Spot platinum fetched $769.00/774.00.

March palladium eked out a 25-cent gain to $191.00 an
ounce. Spot closed at $186/193.

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----------------------------------------------------

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