Gold bounces off on weaker dollar and bargain hunting

08:43, January 19, 2011      

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Gold futures on the COMEX Division of the New York Mercantile Exchange ended a streak of three consecutive sessions of losses and settled moderately higher on Tuesday, as the recent weakness in gold triggered bargain-hunting and the weaker U.S. dollar also enhanced gold's appeal as an alternative assets.

The most active gold contract for February delivery added 7.7 dollars, or 0.6 percent, to 1,368.2 dollars per ounce.

A trader mentioned that the recent sell-off has produced strong buying interest for both physical gold and silver. Meanwhile, the early slide in the greenback also helped to push up gold and silver prices.

"The physical demand is world-wide as savvier investors are using the precious metals as a safe haven investment as global inflation is on the rise," said Mike Daly, a senior gold analyst with PFGbest.

Meanwhile, the stronger crude oil price also buoyed up the precious metal by fueling investors' fear over rising global inflation.

"Global inflation should benefit both Gold and Silver as traditionally these precious metals have retained their value better than most other commodities during times of crisis," Daly added.

Silver futures for March delivery added 59.2 cents, or 2.1 percent, to 28.912 dollars per ounce. April Platinum rose 12.3 dollars, or 0.7 percent, to 1,828.3 dollars per ounce.

Source: Xinhua
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