Gold Rises With Equities

Gold Rises with Equities, Crude Oil & Bond Yields in Thin Holiday Trade

THE PRICE OF GOLD held flat in what dealers called "subdued trading" early in London on Tuesday, returning from the Christmas holidays to record an AM Gold Fix at a one-week high of $1103 an ounce.

The gold price in Euros and Sterling also hit one-week highs, reaching above €765 and £689 an ounce respectively.

World stock markets extended their "Santa Claus rally", pushing London's FTSE100 to fresh 2009 highs above 5,440.

Crude oil slipped one Dollar from Monday's surge to $79 per barrel on the north-eastern United States' cold snap.

"The Dollar's recent firmness was partly due to the covering of excessive short positions," reckons Koichiro Kamei of Japan's Market Strategy Institute, speaking to Reuters.

"That adjustment seems to be coming to an end. Gold's correction may also be over, and talk of central bank buying will again be the main driver."

The US Dollar fell towards a two-week low to the Euro on the currency markets early Tuesday, but held steady against the "safe haven" Japanese Yen at ¥91.70.

UK government bonds sold lower again, pushing the yield offered by 10-year gilts up to a new 2009 high of 4.08%.

German 10-year Bunds yielded 3.37%. US Treasury bonds offered 3.85% on the 10-year note.