Reply #3: Europe gold firm, seen extending bull run in 2005 [View All]

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH12410_2004-12-31_10-57-43_L3180303

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The dollar struggled to stay above Thursday's record low set against the euro at $1.3667 as investors bet on continued dollar weakness next year -- raising the allure of dollar-priced gold as an alternative asset.

Dollar weakness has been the dominant factor behind gold's three-year run higher, with the metal's price reaching its highest in 16-1/2 years this month at $456.75 as worries about the ability of the United States to fund its ballooning twin deficits weighed on the currency.

Bullion has gained almost six percent since the start of this year, with dealers looking for the metal to rise further in 2005 due to continuing positive fundamentals.

James Moore of TheBulliondesk.com said in a daily report that gold was looking ripe for fresh gains.

"Despite the threat of further speculative liquidation and potential institutional sales to fund the $500 million aid package for the Indian Ocean disaster fund, the overriding factor behind gold remains the dollar...keeping the mid to longer term outlook bullish."

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