Gold rises for third straight day

08:18, January 13, 2011      

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Gold futures on the COMEX Division of the New York Mercantile Exchange edged higher on Wednesday, marking the third straight rise this week, as concerns over the European sovereign debt crisis and increasing demands for physical gold continued to bolster the market.

The most active gold contract for February delivery gained 1.5 dollars, or 0.1 percent, to close at 1,385.8 dollars per ounce.

Market traders noted that although the concerns over Portugal's debt problem were temporarily eased after the country successfully auctioned off its bonds on Wednesday, investors snapped up gold at the day's lower prices and pushed up the price.

European finance ministers will discuss increasing the effective lending capacity of their financial rescue fund in the next week. The EU needs a "comprehensive strategy" to restore its public finances through budget measures, financial repair and reforms, said Olli Rehn, the EU's commissioner of economic and monetary affairs.

Moreover, physical dealers said gold could rise further as demand from jewelers and investors picked up in India and China, leading to tighter stocks for gold bars in Singapore and Hong Kong.

In India, jewelers stocked up ahead of the harvest season in the middle of January. Analysts said that gold imports in India are likely to jump 64 percent to 500-550 metric tons in 2011, driven by investment purchases. Besides, worries about inflation in China, the world's second-largest gold consumer after India, drove investors to bullion, while purchases from jewelers also increased before the Lunar New Year in February.

Silver futures for March delivery crept up 4.6 cents, or 0.16 percent, to 29.545 dollars per ounce. Meanwhile, April platinum also hiked 30.8 dollars per ounce to 1,801.1 dollars.

Source: Xinhua
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