Gold hikes as bargain hunters step in

08:20, January 25, 2011      

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Gold futures on the COMEX Division of the New York Mercantile Exchange rose on Monday, as bargain hunters stepped in following a 2-day decline. Besides, a weaker dollar against the euro and inflationary concerns also helped buoy up the market.

The most active gold contract for February delivery gained 3.5 dollars per ounce, or 0.26 percent, to settle at 1,344.5 dollars.

Monday's advance followed a 2-day decline in the market, with the gold price settling down at 1,341 dollars on Friday, the lowest settlement level since Nov. 17. As a result, some investors stepped into the market seeking further price gains.

Upbeat earnings reports from companies such as U.S. industrial bellwether General Electric, along with reduced concerns about eurozone debt problems, had dimmed gold's appeal as safe-haven investment in the previous two trading days. But concerns about inflation may continue to support the market, said market analysts.

There were also worries about global inflation after the head of the European Central Bank announced his concerns about higher energy and food prices, analysts said.

Meanwhile, the dollar dropped to the lowest level against the euro in more than two months, after upbeat data from Germany showed business sentiment rose to its highest in 20 years on the back of resilient recovery in manufacturing sector.

However, silver for March delivery decreased 10.6 cents, or 0. 39 percent, to 27.321 dollars per ounce. April platinum also shed 2.7 dollars, or 0.15 percent, to 1,819.6 dollars per ounce.

Source: Xinhua
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