Gold futures edged higher Monday morning, with traders betting that the fourth-quarter of the year will bring increased demand for the precious metal.

With the market now in the last quarter of the year, the market will likely "see investment interest as well as physical buying pick-up as jewelry manufacturers in Europe and North American begin to stock-up ahead of the Christmas period," said James Moore, an analyst at TheBullionDesk.com. That "could potentially see the metal work its way back towards the $700 level."
Gold for December delivery rose by $3.30 to $607.50 an ounce on the New York Mercantile Exchange. The contract fell $6.70 on Friday to break a seven-session winning streak, but they ended that week with a gain of 1.5%. It lost $30 for the month of September.

December silver climbed by 21 cents, or 1.8%, to $11.75 an ounce, ending the month 11.4% lower. It was up 2% for the week.
In a research note Monday, John Tumazos, an analyst at Prudential, estimated that private investment demand needed to balance the gold markets in 2006 will rise to 935 metric tons from 691 metric tons last year as "scrap supplies rose, jewelry demand fell 19%, central bank sales fell and producer hedge covering rose."
He expects prices to average $600 in 2006 and $450 in 2007.
Weakness in the U.S. dollar likely helped to support gold prices Monday, with the greenback down 0.3% against the yen and down 0.7% against the euro.

In other metals trading, December copper futures rose 4.2 cents to trade at $3.5025. October platinum was up $18.30 at $1,159.50 an ounce while December palladium fell by 40 cents to $316 an ounce.
On the supply side, gold inventories were unchanged at 7.89 million troy ounces as of late Friday, according to Nymex data. Silver supplies fell by 5,005 troy ounces to 105.2 million and copper supplies dropped by 286 short tons to 20,360 short tons.
Metals-mining equities climbed to mirror strength in the precious metals.