Gold leapt once again at the New York opening today, driving back through $661 to regain its 7-month highs above $663.50 per ounce.
"A lot of funds are jumping in and buying," says Walter Otstott, a senior commodity broker at the Dallas Commodity Company Inc.
"I anticipate a run to $700 before you get any significant degree of profit-taking."
The action's been more frantic still for gold priced against the other major currencies. Today saw the US Dollar rise versus both Sterling and Euros.
Added to gold's own rally, that's priced one ounce as high as £341.50 for British investors, alongside a 7-month high of €512.50 for Eurozone buyers.
Sterling's decline – touching $1.945 mid-morning in London, down from $1.972 early Thursday – came on news of a deeper UK trade deficit than traders had expected.
"The trade deficit is a theme for Sterling," says Trevor Williams, chief economist at Lloyds TSB.
"The UK has a very high deficit and this is a running negative that is often overlooked" – but not by BullionVault, however. Click here for why Sterling is fated to fall further...
Meantime in the gold market, "it's definitely on a very good uptrend and $675 is on the cards," reckons Tariq Salaria, analyst at Standard Chartered Bank.
"What we [saw] this morning [was] temporary profit taking...I don't think the IMF news is really impacting the gold price..."
The IMF news? The International Monetary Fund's managing director Rodrigo Rato said earlier that he may act on a panel of "experts" advising him last week to sell 400 tonnes of the global bank's gold reserves.
But if Senor Rato were to dump gold on the market, investors would be wise not to flinch.
Between 1976 and 1980 the IMF unloaded 50 million ounces, about one third of its holdings. Average annual prices rose fivefold regardless.
And the current proposal would be for nearer 12.9 million ounces. (You can read more here...)
The action in gold is also getting support from the oil price, up to $60 per barrel earlier today. And base metal prices have also recovered.
As reported by BullionVault late last week, London-based hedge fund Red Kite may be down 20% for 2007 year so far, thanks to a sharp drop in copper and zinc prices.
Now its investors have accepted Red Kite's request to extend the fund's notice period for withdrawals from 15 days to 45 days. That's eased tension in the metals market, according to Chinese trader interviewed by Bloomberg overnight.
To read more about Red Kite's predicament – and the impact of hedge fund traders on the short-term gold price – click here now...