latest from Kitco on the state of gold..it won't stay down long...

Gold slips as US nears bailout vote

• September 29, 2008 - 9:45AM

Spot gold prices slipped about 1% as US lawmakers closed in on a deal to buy back bad debt, raising hopes for more stability in tumultuous financial markets.

US congressional leaders from both parties said they had reached a tentative agreement on the proposed $US700 billion bailout plan on Sunday.

They were gearing up to vote on Monday on the deal, which would buy bad debt and help ease the financial crisis.

''The market is likely to stabilise as more detailed news of the deal becomes available,'' said Koji Suzuki, senior analyst at SBI Futures.

''Investors are still looking around trying to decide which market provides the best investment,'' he said.

In early trade, spot gold was at $US873.25/874.75, down about 1% from its nominal close on Friday of $US883.25

On Friday, gold ended 1% higher after surging as much as 4% during the session, with safe-haven and technical buying giving way to profit-taking ahead of the weekend.

Gold has gained about 20% since September 11 as safe-haven demand heightened after the collapse in the share price of Lehman Brothers.