Gold Hits Three-Week High Awaiting Key US Data

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"Gold remains remarkably well bid despite some dollar strength. It is playing a little bit of safe-haven role, physical demand is excellent and production is looking pretty sloppy," said David Holmes, director of precious metals sales at Dresdner Kleinwort Investment bank.

Gold hit a three-week high today, helped by safe-haven buying and good physical demand, with investors awaiting the release of U.S. economic data that may set bullion's direction.

Brighter technicals and firm oil also lifted buying. Other metals also gained, with platinum rising to a three-week high and silver rising to its highest level in more than two weeks.

Gold rose to $674.40 an ounce, the highest since August 10, and was quoted at $674.00/674.60 at 0953 GMT, up from $671.80/672.40 late in London on Monday, when the U.S. market was closed for the Labor Day holiday.

"Gold remains remarkably well bid despite some dollar strength. It is playing a little bit of safe-haven role, physical demand is excellent and production is looking pretty sloppy," said David Holmes, director of precious metals sales at Dresdner Kleinwort Investment bank.

"Despite high prices, producers can't even maintain the 2,500-tonne production level. So from a fundamental point of view, the market is quite good," he said, referring to annual global mine production of gold.

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