China produced 240 tons of gold in 2006, an increase of 7.15 percent. The country plans to raise its gold production by 8 percent this year to 260 tons, according to the National Development and Reform Commission (NDRC).

The value of China's gold output totaled $6.625 billion in 2006, rising 34 percent as the price of gold in the markets hit a record high.

Barrick Gold Corp., the world's largest gold producer, said fourth-quarter profit more than doubled as prices climbed, and acquisitions and new mines boosted production.

Net income surged to $418 million, or 48 cents a share, from $175 million, or 32 cents, a year earlier, the Toronto-based company said today in a statement. Sales gained 74 percent to $1.35 billion.

Barrick overtook Newmont Mining Corp. as the biggest gold producer with its $10 billion acquisition of Placer Dome Inc. in March, adding mines in Nevada, Australia and Tanzania. Chief Executive Officer Gregory Wilkins increased output by 48 percent in the quarter.

``Barrick gives you an exposure to the bullion,'' Benoit Brillon, who manages C$6 billion ($5.1 billion) including Barrick at Natcan Investment Management Inc. in Montreal, said before the earnings announcement. ``The cost structure is a bit better at Barrick'' than Newmont, he said.

Shares of Barrick rose 92 cents to C$37.25 yesterday in Toronto Stock Exchange trading. The have risen 13 percent in the past year, compared with a 23 percent rally in gold and a 17 percent decline in Denver-based Newmont.

Gold output in the fourth quarter rose to 2.44 million ounces from 1.65 million ounces, Barrick said.

Goldcorp Inc. said Monday it will post a US$170-million charge against its 2006 earnings and it has agreed to sell the Peak mine in Australia and the Amapari mine in Brazil to GPJ Ventures Ltd. for US$200 million in cash and US$100M in new Peak Gold common shares.

Proven and probable gold reserves at Amapari have been cut to 485,000 ounces as of Dec. 31, 2006, reflecting the exclusion of sulphide mineralization that was previously included.

That will result in the $170M impairment charge, Vancouver-based Goldcorp said in a release.

Goldcorp said it will end up with about 24 per cent of Peak Gold, the new name for GPJ Ventures.

"This transaction underscores our commitment to simplifying Goldcorp's asset portfolio," said CEO Kevin McArthur.

"It sharpens our geographic focus and provides capital that will help fund our growth opportunities and enhance our already-strong financial flexibility. Our ownership interest in Peak Gold will also allow us to participate financially in the future success of that exciting new growth platform."

Gold hit fresh seven-month highs on Monday as the dollar remained weak and as strong Asian buying emerged, said analysts.

Spot gold was quoted at 670 usd an ounce, up from the 668.80 level seen at Friday's close. Earlier in today's session, gold struck 673.15 usd, a fresh seven-month high since last Wednesday.

'Gold has rallied back above 670 usd after strong buying was seen from Japan and in response to the bomb attacks in India,' said TheBullionDesk.com analyst James Moore.

The dollar has softened recently after some soft US data, increasing gold's appeal as an alternative investment.

A source close to Polyus Gold denied on Sunday a newspaper report that Russia's top gold miner had approached Anglo American to buy a stake in Anglo Gold Ashanti.

"It's total nonsense," the source close to the company said.

The Sunday Times had said without citing sources that Polyus Gold had approached Anglo American about its stake in Anglo Gold Ashanti worth 2.25 billion pounds.

The newspaper said one option under consideration is for Anglo American, owner of 41 percent of Anglo Gold and the world's third largest miner, to take a minority stake in an enlarged company

Polyus Gold declined to comment.

No one at Anglo American could immediately be reached for comment. The company is due to report its annual results on Wednesday.

Despite reduced supply and a fall in tonnage, demand for gold in 2006 reached a record US$65bn, the World Gold Council (WGC) said on Thursday.

The WGC said there was positive tonnage growth in the investment and industrial segments and double-digit dollar growth in the jewellery sector.

The record dollar values for overall demand and jewellery demand occurred despite a fall in supply, reducing the quantity of gold purchased.

The 2006 figures, compiled independently for the WGC by GFMS, reveal that identifiable investment demand in 2006 was 7% higher than in 2005 in tonnage terms, (637t vs 596t) and 45% higher in dollar terms, spurred by a 27% year on year tonnage increase in holdings of gold Exchange Traded Funds and similar products.

The fourth quarter was particularly strong with a 19% rise in tonnage terms and a 51% increase in dollar terms, the WGC noted.

Jewellery demand up 14%

Jewellery demand rose 14% in dollar terms in 2006 as a whole, but fell back by 16% in tonnage terms due to a volatile gold price in the first half of the year.

In the industrial sector, demand rose by 7% in tonnage terms and 45% in dollar terms to set a new annual record.

Industrial demand was at its highest ever at 458 tons, while jewellery sales reached an all time record in US$ terms at $44bn.

James Burton, chief executive of the World Gold Council said: "We are very encouraged by the record value of gold demand in 2006, showing that consumers are spending more on gold as jewellery and as an investment.

"However, we must recognise that although we have seen a steep rise in the dollar value of gold demand, there was also a decline in tonnage demand as extreme price volatility impacted consumers' jewellery purchases."

Price volatility

The first half of the year proved a difficult one for the gold jewellery market as high price volatility deterred consumers from buying. However, more stable prices towards the end of the year resulted in a very satisfactory level of demand.

"I am particularly pleased to see the continued growth in demand for gold in industry.

"Gold's unique properties make it ideal for use in the development of medical applications, pollution control, air bags, mobile telephones, laptop computers, and many other things that we consider indispensable in today's society."

Supply fell 13% in tonnage terms including a sharp reduction in net selling by central banks.

The WGC said 2007 began with brisk demand in most jewellery markets in January, while investor interest has also remained positive. Market research findings show that sentiment towards gold jewellery in key markets remains strong.

Prospects for both jewellery and investment demand in the first half of the year are good, although any return of excessive price volatility could hinder jewellery purchases, the WGC concluded.

Gold jumped to a seven-month high of $671.85 an ounce on Wednesday as the dollar hit a six-week low against the euro after U.S. Federal Reserve Chairman Ben Bernanke said inflation pressures were starting to ease.

Gold is often used as a hedge against fluctuations in the dollar, so moves inversely to it.

Long-term sentiment was bullish, but in the near future gold may fall before it rises again, analysts said.

"We remain positive on gold and forecast the metal will average $700/oz this year, based on a combination of gold market fundamentals -- primarily due to a much improved buying from the physical market and the material chance of lower net central bank sales -- and expectations of a weaker USD," John Reade, head of metals strategy at UBS, said in market report.

"But gold has moved too high, too quickly and, to be blunt, the wrong types of investors own it."

Short-term speculators who have bought gold are likely to sell it once the price rises in order to make a quick profot.

Technical signs on the charts also indicated a short-term pullback was likely en route to its July high of $677 and beyond.

"Into here we expect the market to struggle short term, but bigger picture, we remain steadfast bulls," analysts at Barclays Capital said.

Gold and base metals producer Agnico-Eagle Mines Ltd. has agreed to buy junior miner Cumberland Resources Ltd. in a friendly deal worth about C$693 million ($592 million), boosting its gold production and reserves.

The deal will give Agnico-Eagle full ownership of Cumberland's Meadowbank gold project in Canada's Arctic territory of Nunavut. Now under construction, the project has proven and probable reserves of 2.9 million ounces of gold.

Initial production is expected in early 2010, with annual production forecast to average 400,000 ounces of gold in the first four years, and average 350,000 ounces per year over the life of the mine.

Gold jumped above $668 an ounce today to its highest in seven months before losing some of the gains to weaker oil prices, but dealers were upbeat after the metal cleared a technical hurdle last week.

Spot gold hit an intraday high of $668,20 an ounce, its best since mid-July on short covering, before slipping to $665,75/666,50 an ounce in early trade, slightly lower than $666,50/667,20 late in New York. A public holiday in key player Japan also capped gains.

Gold rose about 1% in the US market on Friday after crude oil regained $60 a barrel for the first time since early January, triggering fund buying and short covering, and helping the metal breach $662 an ounce. Firm oil prices raise gold’s appeal as a hedge against inflation.

"I think post-G7, there’s speculation about where the yen would go, what that would possibly also mean, I suspect for gold, with Japanese fears of inflation," said Darren Heathcote of Investec Australia in Sydney.

"We might see more of a reaction tomorrow when TOCOM reopens. Certainly, gold is technically looking strong. I see no reason why, at this present moment, we wouldn’t want to head north again to test recent highs," he said.

Upside targets were pegged around $676 and $684 an ounce. Purchases from Japanese investors helped gold reach multi-year highs last year. Gold hit a 26-year high of $730 an ounce in mid-May.

Gold bounced back and held above $650 ounce on Thursday with the help of firm oil, but the metal looked vulnerable after several failed attempts to breach key resistance around $660 an ounce.

Sales of gold scrap from Indonesia and Thailand dominated the physical sector in Southeast Asia, though dealers also noted some buying interest from India, the world's largest consumer.

In other precious metals, platinum fell after jumping to a 10-week high of $1,200 on Wednesday on speculative buying as well as purchases by Chinese jewellers ahead of the Lunar New Year later this month.

Spot gold rose to $652.70/653.40 an ounce from $651.70/652.40 an ounce late in the U.S. market on Wednesday, when it dropped more than $1 after crude oil reversed gains.

"The market remains choppy with gold unable to break out of recent ranges," Investec Australia said in a report.

"A concerted break above $660 may open the door for further buying, but in the absence of any break then gold looks vulnerable in the short term to move back below the $650 level," it said.

Gold rallied to a six-month high of around $661 an ounce last week but attempts to revisit the level were met by profit taking, in which jewellers and speculators cashed in their holdings.

Dealers said gold would have to crack $660 to reach new highs around $670 and $680, with the help of either a weaker dollar or firmer oil.

Gold futures moved modestly higher Wednesday afternoon, holding their ground near $660 an ounce with the metal's safe-haven appeal in the face of rising energy costs underpinning prices.

The market sees the need "of maintaining $655 for as many days as possible ... before a move to higher ground is undertaken with confidence," said Jon Nadler, an investment-products analyst at bullion dealers Kitco.com, in e-mailed commentary.
Gold for April delivery was last up 80 cents at $660.30 an ounce on the New York Mercantile Exchange.

In the previous session, the contract closed up $2.60 at $658.70 an ounce, after reaching a high of $663.70. It's up $6.70 from Friday's closing level, but the contract remains below Thursday's close of $663, which marked its loftiest in nearly six months.

Gold rose above $650 an ounce on Tuesday on firm oil and a slightly weaker dollar, and analysts said it could jump if it holds onto recent gains a bit longer.

Gold broke the $650-an-ounce mark several times last week but profit-taking pushed down prices, which have risen about nine percent since Jan. 5 when it fell to a two-month low.

Spot gold was quoted at $652.40/653.15 an ounce by 1630 GMT, higher than $649.00/649.70 late in New York on Monday, when it rose about $2 on renewed buying interest from funds.

Earlier on Tuesday it hit a high of $658.40.

Gold erased overnight gains on Monday, pressured by slightly weaker oil prices and a rise in the dollar, but dealers said the metal may strengthen after consolidating around current levels.

Spot gold rose to $649.65 an ounce before falling back to $647.10/647.85 by 1052 GMT, versus $647.00/647.70 in New York late on Friday, when it tumbled $10 because of a higher dollar.

"We had a good run last week but the fact that we didn't manage again to close a week above $650 is disappointing. We haven't seen any convincing move above that level and a lot of profit-taking is going on," said Michael Widmer, analyst at Calyon Corporate and Investment Bank.

"Overall, I would still expect the U.S. to lower interest rates. Then you are back to a weaker U.S. economy, a downward pressure on the dollar and more diversification out of assets that have closer links to economic growth into gold. And these factors should help gold."

The International Monetary Fund should sell $US6.6 billion worth of gold and invest the proceeds in higher-yielding assets as part of a strategy to put its finances on a sound long-term footing, an expert panel has recommended.
The experts also advised that the IMF consider charging for the bilateral technical assistance it provides to countries, although they said any such charging scheme should be carefully designed to ensure poor countries continued to benefit from IMF help.

The panel, which included Alan Greenspan, former chairman of the US Federal Reserve, and Jean-Claude Trichet, president of the European Central Bank, estimated that the sale of 400 tonnes of gold would create an endowment fund that would earn the IMF $US195 million a year in additional revenues after inflation. The IMF holds 3217 tonnes of gold in total.

The panel recommend that the world's central banks be asked to reduce their planned gold sales - set out in an international accord - by an equivalent amount so as to offset the impact of the IMF sale on the world gold market.

The IMF faces serious long-term financial problems because its traditional source of revenue - profits on lending - has dried up as countries have paid back giant loans extended during financial crises.

The extra money is needed to help plug an estimated shortfall of $US400 million a year in the IMF's current income and expenses by 2010. The IMF is funding current activities in part by drawing on its reserves - not sustainable in the long run.

The panel recommends that the IMF put some of the quota money subscribed by IMF shareholder governments to work in capital markets.

This could involve very large sums, with the panel floating the idea of investing $US30 billion. It estimates that this could earn the IMF about $US300 million a year after paying interest on the quota money to the governments providing it.

It suggests loosening the rules governing how the IMF invests its existing $US9 billion reserves in an attempt to boost its income.

Andrew Crockett, president of JPMorgan Chase International and chairman of the panel, said it was no longer appropriate for the IMF to rely on profits from crisis lending to fund all its activities. Some outside experts say the IMF should deal with its financial problems by cutting staff costs rather than by raising revenues.

Agreement on IMF gold sales will need to be approved by an 85 per cent majority of the IMF's shareholders and by the US Congress.

Gold futures climbed Thursday morning to their highest level since mid-August, ready to extend their winning streak to three sessions as recent strength in oil prices and a dip in the value of the dollar helped lift prices for the precious metals past $660 an ounce.
Gold for February delivery climbed $7 to stand at $659 an ounce on the New York Mercantile Exchange. It rose as high as $661.50 earlier, an intraday level the contract hasn't seen since Aug. 11.
April gold was last up $8.40 to $666.30 after a high of $667, the contract's strongest intraday level since Aug. 9.
"As expected, gold has broken above key resistance at $650 and now appears to be making a beeline towards $700," said Peter Grandich, editor of the Grandich Letter.