Gold rose above $673 per ounce today as the week got started in Asia.

The move came on fresh weakness in the US Dollar against the Japanese Yen and Swiss France – previously the biggest losers on the global currency markets so far this year.

Versus the Euro and Sterling the Dollar was firmer. That helped gold rise to £344 for British investors by the time London opened today. It broke back above €512 per ounce for Eurozone buyers, too.

Today's action so far came even though many major exchanges in the strong physical markets of Asia were closed for the Lunar New Year celebrations.

The Year of the Pig festivities will see Taiwan and China's domestic markets closed for the whole week. Hong Kong and Singapore will be shut until Wednesday.

South Korea and Malaysia are closed Monday – and New York will also be closed today for President's Day.

But in Sydney and Tokyo, "there is evidence of investor support for gold and that is apparent in trading this morning," says David Moore, commodities strategist at Commonwealth Bank of Australia.

Last week's consolidation above $669 – where gold closed New York on Friday – might be further strengthened by US data due this week, reports the Precious Metals Weekly for Heraeus.

"US consumer price data on Wednesday [are] likely to confirm the picture that inflation pressures are easing," write the team's analysts in Hanau, Germany.

A lack of rising inflation numbers should put US interest rates on "hold" for the time being. With the gap between Fed rates and official inflation near multi-decade lows, that's good for gold – click here to find out why...

Looking ahead, "near term support for gold could be between $650-660 before staging the assault to [our] $700 target," according to Standard Bank in Sydney.

The Monex report reckons that "gold support is now anticipated at $663, then $658, and then $646...and resistance [is] anticipated at $673, then $686, and then $700."

Whatever the technical movements in gold this week, the demand-supply dynamics continue to suggest higher prices ahead. Late last week saw the release of the highly respected GFMS data for the World Gold Council.

The report showed total supply dropped 23% in tonnage terms in 2006. Demand rose 8%, meantime. It hit its third running record when measured in Dollar terms.

Back in Asia, China plans to produce 260 tons of gold in 2007, up nearly 20 tons from last year, according to the National Development and Reform Commission (NDRC).

The NDRC also says that China's total gold mine reserves grew by more than 650 tonnes in 2006.

But China's leaders in Beijing know they can't rely on domestic minerals output to meet the nation's fast-growing demand. That's why President Hu Jintao recently visited African leaders to arrange special investment and commodity-supply packages.

For a fuller report – plus expert analysis of China's new currency reserves policy – click here now...