Gold rallies as dollar softens before Fed's decision

08:13, March 17, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange closed much higher on Tuesday as dollar went down before the U.S. Federal Reserve announced its rate decision. Silver and platinum both rose.

The most active gold contract for April delivery gained 17.10 U. S. dollars, or 1.5 percent, to finish at 1,122.50 dollars, touching a 4-day high of 1,128.10 shortly before the precious metal closed.

The U.S. dollar softened against the euro and other major currencies on Tuesday, as traders waited for the Fed policy meeting later in the session.

Worries on Greece's debt crisis seemed eased a lot after S&P affirmed the country's BBB+ long-term and A-2 short-term sovereign credit ratings and removed them from CreditWatch.Meanwhile, finance ministers from the European Union who met in Brussels on Tuesday were reportedly to expect to endorse Greece's fiscal austerity plans.

Affected by the encouraging news, the dollar rate against euro fell to 1.3741 from 1.3672 on late Monday by the end of gold floor trading time. The dollar index, measuring the U.S. unit against a trade-weighted basket of six major currencies, slid to 79.88 from 80.22. Soft dollar usually attracts investors to buy gold as hedge assets.

The Fed held benchmark rates near zero as expected on Tuesday after gold pit trading ended, reiterating to keep the rates at record low for an extended period.

May silver rose 24.6 cents to 17.354 dollars per ounce. April platinum was up 14.90 dollars to ,1530.70 dollars an ounce.

Source: Xinhua
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