The price of spot gold rose to $647 by the opening in London today, after holding above Wednesday's high all through the Asian session.

Gold rose 1.3% from yesterday's low, yet again moving in lock-step with global equity markets.

The MSCI Asia-Pacific index of more than 1,000 stocks added 1% today. In Tokyo, the Nikkei took its cue from the US markets' bounce overnight, rising 1.5%.

Gold futures traded at Japan's Tocom exchange rose 1.2% to the equivalent of $654 per ounce for Feb. '08 delivery.

"The lack of confidence in the equity sell-offs became evident when the Dow regained its lost ground to finish 0.48% in the black," says Brandon Lloyd for Mitsui in Sydney.

"There was a sense of deja vu [in gold] as everyone was caught short, prompting the rally back to this morning's $643-$644 area."

Lloyd now puts support for gold at $635, with the next major resistance level at $665.

"The stock markets' success in halting their declines helped to attract some investors back to the bullion market," agrees Cai Zhenwei, a gold trader at Bank of China in Shanghai.

Cai told Bloomberg earlier that gold's Wednesday low of $637.36 per ounce sits right on the trend line of gold's move higher that started in Oct.

Compared with the sell-off of early this month, yesterday's bounce came off a higher low. (For more technical analysis of the spot gold chart today, click here...)

Looking ahead, gold analysts will be joined by equity, bond and real estate investors waiting for today's release of US producer price inflation just ahead of the opening bell on Wall Street.

Consumer price data is due tomorrow (Friday), again at 13:30 GMT.

Higher inflation amid the current turmoil in the US mortgage market could put a squeeze on the Federal Reserve: to raise or not to raise?

Either way, the gap between US interest rates and US inflation leaves little room for US investors to earn a decent return on their Dollar savings. (Click here to read more about gold's relationship with US interest rates now...)

In Zurich, meantime, the Swiss National Bank is expected to raise its interest rates at 13:00 GMT today.

A major player in the global "carry trade", the Swiss Franc has shed more than a quarter of its value versus the Dollar since Switzerland cut its short-term lending rates below 0.75%.

Hedge funds and other speculative investors were only too happy to borrow such cheap money, investing it in higher-yielding currencies – such as the New Zealand Dollar – for easy gains.

But the New Zealand Dollar has lost 5.5% of its value since the shake-out in world equity and bond markets began at the start of this month.

Now the New Zealand central bank may have to raise its lending rates to 7.5%, says Reserve Bank governor, Alan Bolland, to counter the economic effect of all that "hot money" fleeing the country. (To see the mess Thailand created trying to pre-empt this problem recently, click here...)

"The predominant concern is sustained unwinding of the carry trade," says Monica Fan, head of currencies at RBC Capital in London.

But even without the RBNZ raising Kiwi Dollar rates above 7.50%, hedge fund speculators can still drive a truck through the 700 points of carry sitting between New Zealand and Japan.

A hike at the Swiss National Bank this afternoon would only reduce the differential between CHF and Sterling rates to 300 points of carry.

The effects of all this cheap money on gold? Click here to learn why gold started moving in lock-step with global stock markets back in 2003 – and the outlook for the value of cash in 2007...