Gold inches up as dollar slips, crude oil surges

08:01, August 03, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange eked out a 0.1-percent gain on Monday, benefiting from investors' rising interest in risky assets as well as the weaker dollar. Silver and platinum both posted strong gains.

The most active gold contract for December delivery was up 1.5 dollars, or 0.1 percent, to finish at 1,185.4 U.S. dollars per ounce. The price once touched 1,193.90 dollars, the highest level for a most-active contract since July 26.

U.S. equity markets extended strong gains on Monday, after an increase of 7 percent last month, which was the best monthly gain in a year, supported by upbeat second quarter results from U.S. companies as well as major European banks. The strong rally in the U.S. and European stocks markets further lifted investors' risk appetite and the commodities markets.

Meanwhile, a weaker-than-expected drop in a gauge of U.S manufacturing activity and a surprise jump in construction spending gave strong support to commodities markets, including precious metals, on speculations that the global economic recovery, which is getting momentum, would boost demand for raw materials.

The euro rose to a three-month high against the dollar on Monday, while crude oil also surged on the back of rising equity markets. The weaker dollar and stronger crude oil have both contributed to adding upward pressure on gold, but the surging euro attracted many investors to sell off the bullion and purchase euro for higher returns, keeping a lid on gold price.

September silver climbed 41.6 cents, or 2.3 percent, to settle at 18.419 dollars per ounce. October platinum rose 25.4 dollars, or 1.6 percent, to settle at 1,602.2 dollars per ounce.

Source: Xinhua


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