Gold rises above 1,110 dollars as euro strengthens

08:29, March 30, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange closed higher on Monday, as dollar slipped against euro and oil prices soared. Sliver and platinum both surged.

The most active gold contract for April delivery rose 6.0 U.S. dollars, or 0.5 percent, to finish at 1,110.3 dollars per ounce.

The euro strengthened as eurozone leaders agreed on an emergency bailout plan for debt-laden Greece last week and Greece came back to the capital market selling seven-year bonds on Monday.

Although investor demand for Greece's 5 billion euros of 7-year benchmark bonds sold on Monday was softer than the previous 5- billion-euro, 10-year issue, euro extended gains against major currencies on Monday since the agreement among eurozone leaders to provide a safe net for Greece eased worries of a deeper crisis.

The U.S. Commerce Department said on Monday that personal spending rose in February, which helped lift traders' confidence that demand for crude oil would improve, and may support higher crude oil prices.

The crude oil prices for May delivery rose 2.17 dollars to settle at 82.17 a barrel.

The weaker dollar increased the perceived value of hard assets such as gold, and the rallied oil prices also helped lift the gold price as investors generally buy gold as a hedge or safe haven against oil-led inflation.

May silver was up 48.1 cents to 17.387 dollars per ounce. July platinum rose 30.8 dollars to 1,631.5 dollars an ounce.

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