By Kishori Krishnan Exclusive to Gold Investing News

Gold edged up to 9.9 per cent last week as the dollar dropped 4 per cent to a two-month low versus the euro, which increased investor demand for the alternative asset, while platinum bounced back on technical buying after a sell-off on demand fears petered out. Gold was also supported after oil rose to $47 a barrel on signs that OPEC members are set to make another deep cut in supply when it meets on Wednesday.

Gold reached platinum prices, with both platinum and palladium falling on Friday in line with other commodities, following the collapse of a mooted deal to rescue ailing U.S. carmakers that knocked investors’ confidence. On Thursday night, a $14 billion bailout deal designed to aid the struggling Big Three U.S. automakers collapsed in the Senate, as a dispute over union wages derailed a compromise between Republicans and Democrats who had worked feverishly to throw Detroit a lifeline.

Dennis Gartman, an economist and editor of the Gartman Letter in Suffolk, Virginia said, “Gold is being seen as the one area of liquidity where cash can be gotten.”

Added Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago to Bloomberg, “Gold has held up better than any asset off the uncertain monetary outlook. The dollar seems to be under a lot of pressure and there’s still uncertainty to the economic outlook, and that’s giving a lift to gold.”

Spot gold rose to $827.65 per ounce of gold, up 0.9 per cent from New York’s notional close of $820.45. COMEX gold futures were higher in Asia after falling more than $6 per ounce. The most active February contract GCG9 was trading up 1.1 per cent at $829.5 an ounce in after-hours trading on the COMEX division of the New York Mercantile Exchange, Friday.

Delayed Development

Russia’s fifth-biggest gold miner is delaying commissioning a deposit in Novoshirokinskoye, in southeast Russia, and a mine in Mayskoye, in the remote northeastern region of Chukotka. The postponements came after Highland Gold, (HGM.L) which is listed on London’s AIM market, began a review of its operations in September seeking to conserve cash, because of the current tough conditions.

The mine, like other commodity producers, is reeling under the double whammy of falling prices and a shortage of credit. Duncan Baxter, Highland Gold’s chairman, said: “The world economic climate has changed dramatically since our positive interim results reported in September. This has led the board and management to take aggressive action to protect the strength of our balance sheet. Slowing the development process of our gold deposits is a logical decision in these circumstances.”

Roman Abramovich, the Russian billionaire and owner of Chelsea Football Club, has seen his investment in Highland Gold sink rapidly since he bought a 4 per cent holding a year ago. The oligarch’s investment vehicle Millhouse paid $400 million, or 151p a share. Last week, Mr Abramovich’s holding was worth only $104 million.

Highland Gold said that despite the development delays it remained on course to reach its production goal for this year of 155,000 to 165,000 ounces of gold.

Happy Speculators

Speculators took a shine to gold drill results. Rubicon Minerals (TSX: T.RMX) shares climbed 19 per cent after the miner reported results of step-out drilling from barge and land-based drilling at its 100 per cent controlled Phoenix Gold Project located in the heart of the Red Lake gold district of Ontario.

Shares of Chalk Media (TSX: V.CKM) skyrocketed 189 per cent as the multimedia content provider said it has entered into an arrangement agreement for Research In Motion (TSX: T.RIM) to acquire Chalk in an all-cash transaction at a price per share of 14.2 cents, or $23.125 million.

The market appears to like Agnico-Eagle Mines’ (TSX: AEM) 2009 production and cost guidance, where shares jumped 8 per cent. Agnico said that payable gold production is expected to total approx 590,000 ounces in 2009, a 100 per cent increase from the 2008 projected level and grow to 1.2 million ounces in 2010. In December 2007, production guidance for 2009 was slated at 687,000 ounces.

Orezone Resources (TSX: T.OZN), meanwhile, announced that it has entered into a definitive arrangement agreement whereby IAMGOLD (TSX: T.IMG) would acquire, via a plan of arrangement, all of the outstanding common shares of Orezone for about US$139 million, or 49 cents a share. Orezone stock popped 197 per cent to 52 cents.

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