Dollar's Dive Drives Gold

Longer term, however, he says the market top at around $725 reached in mid-May will only be important when it is breached, and cautions traders not to view the peak as a major resistance level. Presuming it is breached it will then provide firm technical support, Levin says.

In other news, the Moscow-based Interfax news agency reported that Russian gold production dipped 1.3% to 142.4 tons in the first 10 months of the year, compared to the same period in 1005. Falling mine output, down 1.8% at 128.8 tons was offset by increases in secondary production.

Among the miners, shares of Meridian Gold(MDG Quote) were jumping 5.4%, while those of Agnico Eagle Mines(AEM Quote) were jumping almost 6%.

In base metals, electronic trading on the Comex saw prices for the March contract jumping 9.9 cents to $3.235 a pound, on a combination of supply concerns and currency factors.

"Shanghai stocks of copper fell 4,435 tons this week, so shorts are covering," says William Adams, an analyst at Basemetals.com in London.

In steel, observers see prices in China softening with ongoing weakness.

Chinese "steel demand growth in 2006 is slowing and will likely continue to decrease in 2007 due to expected lower GDP growth next year," states Shanghai-based Growell Research & Consulting in its latest China Steel Briefing. The firm says local prices for steel declined this week, and the softness should continue through December.

Shares of steel-maker Nucor (NUE Quote) were slipping 0.7% recently.