Gold climbs after U.S. GDP report

12:05, July 31, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange struggled on Friday to regain much of its lost ground this week, as the lower-than-expected U.S. second quarter GDP data helped reinvigorate demand for safe-haven assets. Silver and platinum also extended gains.

The most active gold contract for December delivery rose 12.7 dollars, or 1.1 percent, to finish at 1,183.9 U.S. dollars per ounce.

The U.S. Commerce Department said on Friday that U.S. gross domestic product climbed at an annual pace of 2.4 percent in the second quarter, which is lower than economists' estimate of 2.5 percent, compared with 3.7 percent in the first quarter.

The lower-than-expected data confirmed investors' speculations that the U.S economic recovery lost its momentum recently with high unemployment and shrinking customer spending, and sparked a return of demand for safe-haven assets, which offered solid support to gold price on Friday.

Dollar softened after the report was released, giving further support to gold by making it less expensive for those using other currencies. Gold also posted gains after a report showed manufacturing activity in the Chicago region increased more than expected in July.

Gold lost 5 percent in July, which was the first monthly decline since March. The largest monthly dip since last December has renewed interest in the buying of physical bullion from global investors.

September silver climbed 38.6 cents, or 2.2 percent, to settle at 18.003 dollars per ounce. October platinum rose 13.4 dollars, or 0.9 percent, to settle at 1,576.8 dollars per ounce.

Source: Xinhua


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