The Hindu Business Line : Gold may lose more sheen on Blix report

NOW that the chief UN Weapons Inspector, Mr. Hans Blix, has in a sense dashed the US hopes of mounting an immediate attack on Iraq by virtually exonerating the latter, what is in store for the gold market when trading begins on Monday? This is the million-dollar question engaging everyone's attention.

Till the time of writing this report, the US reaction to the Blix report was not out; but there is reason to believe the US will take some more time to come up with something to lend legitimacy to its intentions.

Even by late Friday, the gold market seemed to have discounted the possibility of an immediate attack. The official price on Friday was $354.25 per ounce, London PM fix. The yellow metal has already lost nearly $20 an ounce over the week.

There is strong possibility that the long liquidation witnessed on Friday would restart on Monday. There clearly is a downside for gold. At the current high prices, demand for the metal has suffered and high prices are seen unsustainable in the absence of demand.

In the local market too prices are expected to come under pressure. In the early trading on Saturday, gold prices remained steady. Several players this correspondent spoke to anticipated a fall in price. The only factor to provide some support will be the weakening rupee.

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