Gold surged past $1,000 per ounce on Tuesday backed by momentum buying and dollar weakness, but ultimately closed shy of the key psychological barrier of $1000 per oz, although it was slightly higher than Friday's close. Silver outperformed gold as it surged by over 1 percent on Comex following the rise in industrial metals largely.

IN FOCUS:

The Singapore Commodity Exchange Ltd (SICOM) will launch a new trading platform called exchange-traded Deferred Settlement Gold Contract in the next two months, its chief executive said on Wednesday. This product mirrors the Loco London gold market which trades actively over-the-counter.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,077.63 tonnes as of Sept. 8, unchanged from Monday.

The dollar plunged on concern over its long-term status as the world's reserve currency, following a United Nations agency report on Monday. Options-related euro buying also fuelled broad-based selling in the dollar.

South Africa's gold output fell 9.3 percent year-on-year in the second quarter of 2009, despite being measured against lower gold production in the same period last year when output fell due to a power shortage.

South Africa's Chamber of Mines said in a statement on Tuesday production rose 0.4 percent quarter-on-quarter to 51,634 kg in the second quarter of 2009 compared with the first quarter of the year.

India's physical gold prices were higher on Tuesday tracking international prices but sluggish domestic demand limited the upside, dealers said.

FUNDAMENTAL OUTLOOK:

We do not expect immediate upside in gold from these levels. However, some profit taking may be witnessed today after a magnificent rally witnessed in last few sessions. Silver continues to look good. We expect further upside in Silver during the day.