With a lack of fresh catalysts to trigger a significant move in either direction, we expect gold to remain in its consolidation mood over the near term.

There is no market-specific impetus for fresh long positions to be established at present. Sentiment has been weakened by weakness across commodities over the past few days and the dollar is holding up well.

We will not rule out the possibility of further weakness and prices are likely to remain volatile in a broader range.

We believe that the fund interest in silver is built upon a much narrower base of investors than gold, leaving it more vulnerable to big price moves in either direction.

The weaker (gold-dollar) correlation late last year and early this year was due to the overwhelming enthusiasm among the speculative community to drive prices higher.

The strong price action and impressive technical trends in various currencies suggest prices should remain elevated in 2006.