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Volatile gold benefits from weak dollar, PGMs extend gains

By Clara Denina

- Gold traded in extremely volatile conditions in early-afternoon trade on Monday, but mostly moved into the plus column in the aftermath of a US government rescue plan to tackle the worst financial crisis since the Great Depression, which has led to significant dollar depreciation.


- Spot gold was up $2.10 to $879.40/879.90 an ounce, having swung in a wide range between a low of $862.10 and $886 an ounce today. On the charts, the next resistance level is now pegged at $893, while support is seen at $844.


- The dollar dropped to a three-week low against the euro on concern that the US Treasury Secretary's plan to deal with the toxic bank assets behind the credit crisis by buying a mountain of bad mortgage debt will widen the country's budget deficit, leaving long-term economic structural problems intact.


- Meanwhile, the PGMs extended earlier gains, with platinum rising $59, or 5.1 percent to an intraday high of $1,212 an ounce at one stage and palladium up to its best in ten days at $250 an ounce at one point. Platinum, which rose some ten percent in the past two sessions, was last quoted at $$1,200/1,205 an ounce, still up $47, while palladium was standing at $246/250 an ounce, up $8, or 3.4 percent.


- Elsewhere, silver rose to its best since September 5 at $13.11 an ounce at one point, before settling at $12.89/12.91 an ounce, up 18 cents.


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