Physical gold bullion prices rose at the start of Asian trade Monday, hitting a fresh 11-month high above $693.60 per ounce before slipping 0.4% to the London opening.

Spot gold prices for Good Delivery bars began the week in London at $690.80, nearly $3 higher from last Monday.

Gold closed Friday in New York higher for the seventh week running. It's now added more than 9% against the US Dollar since March 5th.

"Bullish technicals are drawing a lot of buying in gold," reckons Shuji Sugata, a manager at Mitsubishi Corp.

"The strength in platinum is also lifting sentiment for gold." (Click here for more on the upcoming platinum ETF...)

"Basically, gold is heading towards $700, but the market may need fresh factors to test that level."

Gold remains off its Feb. highs versus the other major currencies, however.

Versus the Euro, gold started today's European session at €508.80 per ounce. It broke €522 per ounce on Feb. 26th.

Against the Japanese Yen, physical gold for immediate delivery closed Tokyo today at ¥81,790 per ounce, more than 1.2% off its two-decade top of Feb. this year.

Gold for delivery in Feb. '08 rose 0.8% at the Tocom to equal $698 per ounce.

And versus the Pound Sterling, spot gold prices opened London at £345.20, still 1.3% off the peak of eight weeks ago.

Gold for British investors continues to lag thanks to Sterling's quarter-century highs against the Dollar. The Pound dipped below $2.000 at the London opening today on news that the broad money supply rose by £15.8 billion in March.

The 12-month growth rate in the supply of Sterling rose to 12.8%. Last month marked two full years of double-digit growth in the UK's money supply. (Click here for a monetarist view of the outlook for Sterling...)

In the physical gold market, last week's Akshaya Thrithiya has brought mixed news from India's jewelry sector.

Jewelers in the city of Vijayawada reported slower than expected sales on Thursday. Business was dull until the afternoon according to K. G. N. Prasad, president of the Vijayawada Gold Jewellers and Bullion Traders Association.

But the bigger jewelry stores remain confident they'll report high sales overall after introducing a pre-booking facility for big customers. It accounted for 25-30% of total sales according to The Hindu newspaper.

"Sales will double this year compared to last year," says Vadlamudi Venkat Rao, owner of Anjayneya Jewellers in the city.

The World Gold Council of India also reckons that sales could be nearly double last year's levels.

"About 50 to 60 tonnes of gold were sold during this year's Akshaya Tritiya festival," says the WGC's local vice-president, K.Shivram, "compared to 35 tonnes last year.

"It was a terrific success." (Click here for more on India's gold market demand...)

Bad news from South Africa's gold-mining sector, however. It will continue to disappoint, warns one hedge fund manager, because it continues to discount a much higher gold price.

Wayne McCurrie of Advantage Asset Management, another South African fund, agrees.

"[Gold shares] dividend yield is about half the market...At around 1.2% [it] is one of the lowest for all the big sectors.

"You get way more than that in a savings account, even after tax."

South African savings accounts now pay 12.5%; CPI inflation has risen to above 6% per year. But the real rate of interest elsewhere in the world continues to shrink.

Savings accounts in the United Kingdom are now destroying wealth after inflation and tax. The real rate of interest in the United States has tipped sharply lower.

History says this poor return on cash should prove bullish for gold prices – click here for the full story now...