Gold seeks to establish trend
LONDON, Feb 23 (Reuters) Gold prices eased into a narrow range on Thursday, midway between the high and the low for the month, as the market searched for fresh impetus, dealers said.
''You are not getting much direction from oil because it is moving up and down a lot. It's not showing much of a trend,'' said Stephen Briggs, economist at SG Corporate and Investment Banking.
''People are a bit uncertain and the base metals are probably not helping...Gold seems to be struggling to get back above 5 -- the halfway point between the high and the low.'' Gold surged to a 25-year high of 4.60 an ounce earlier this month before slipping as low as 5 last week. Spot was quoted at 2.25/553.00 by 1050 GMT (1520 IST), against 3.90/554.80 in New York late on Wednesday.
It traded in a band of just on Thursday, compared with movements of - earlier this month.
The oil market remained choppy, falling on Thursday after rising the previous day. Base metals have fallen sharply after climbing to new highs in recent weeks.
''We believe that gold is attempting to find a range with the recent extremes of 5 and 5 likely to confine the metal for a while,'' said John Reade, precious metals analyst at UBS Investment Bank.
''Gold is in search of a fresh catalyst to return it to recent highs,'' he said in a daily report.
LONG-TERM TREND Analysts said the metal had potential to bounce bank in the long run.
''The underlying attitude towards metals in general and gold in particular is still positive. The bias still has to be to the upside, but people are reminded that this isn't a one-way street,'' Briggs said.
The market showed a muted reaction to Wednesday's report by the World Gold Council that showed fourth-quarter 2005 global gold demand fell 15 per cent from a year earlier to 943 tonnes as high and volatile prices capped buying by the jewellery sector.
Traders were watching developments at the huge mine owned by a unit of Freeport-McMoRan Copper&Gold Inc. in Indonesia which has suspended operations since Wednesday.
The mine is believed to have one of the biggest gold deposits and the world's third-largest copper reserves.
In Japan, the benchmark most distant December gold contract on the Tokyo Commodity Exchange closed at 2,102 yen per gram, down 38 yen or 1.8 per cent from Wednesday's close.
In other precious metals, platinum fell to ,022/1,026, while palladium was little changed at 3/287 from 4/288.
Silver was at .58/9.61 an ounce, against .60/9.63 late in New York.
REUTERS SD PM1724