Gold edges up as dollar extends losses

08:35, July 16, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange eked out a 0.1-percent gain on Thursday, as the Fed's bleak outlook on the U.S. economy and a series of disappointing economic reports deepened investors' pessimism about recovery, and pushed them to the safe-haven zone of gold. Silver and platinum both advanced.

The most active gold contract for August delivery rose 1.3 dollars, or 0.1 percent, to finish at 1,208.3 U.S. dollars per ounce.

The U.S. Federal Reserve said on Wednesday that more measures might be taken to bolster U.S economy, and lowered its forecast for U.S. economic growth this year, which sparked investors' fears of a slowing U.S. economic recovery, and weighed on the dollar.

The U.S. Labor Department said on Thursday that the number of people filing for unemployment benefits for the first time in the country dropped last week, but two reports on July manufacturing activity in the Philadelphia area and New York region suggested that such activity expanded at the slowest pace, which further indicated that the U.S. economic recovery might be losing its momentum.

Meanwhile, the strong demand for Spanish government bonds this week alleviated investors' worries about the European fiscal health, and boosted the euro to climb against the dollar and touch 2-month highs on Thursday. While the dollar continued its inexorable march downward against other major currencies, investors have a more pessimistic outlook for the U.S. economy. The sharp break in the dollar has increased gold's appeal of safe- haven.

September silver was up 7.2 cents, or 0.4 percent, to settle at 18.362 dollars per ounce, October platinum climbed 13.1 dollars, or 0.9 percent, to settle at 1,533.7 dollars per ounce.



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