05/06/07: Gold levels off above $670 mark

Gold has levelled off above the $670 mark as the dollar weakened slightly against the euro.

"A slightly weaker dollar is supporting gold today although we're still rangebound," Richard England of Standard Bank told Forbes. "We need to get above $673-675 on the charts."

A major factor in ensuring gold remained above the $670 level, at $670.80 in late New York trading last night (Monday, June 4), was inflation data suggesting that the European Central Bank (ECB) would raise interest rates.

The price of gold hit $671.70 on Friday on news that the ECB would not be selling off any more gold until at least September.

Meanwhile it was revealed that the Bank of Spain - a signatory to the European Central Bank Gold Sales Agreement - had sold 28 tons of gold in May from its reserves.

Some commentators believe that the recent bounce back in the price of gold, following declines from last year's record highs, may not be sustainable.

Writing in MarketWatch, Mark Hulbert noted that gold is still more than $10 per ounce lower than it was just one month ago.