Gold ends moderately higher as dollar slips

08:17, August 04, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange extended gain for the 5th consecutive session on Tuesday, capping the longest rally in almost four months, supported by the weaker dollar and much stronger demand for physical gold from Asian buyers. Silver barely changed, and platinum dropped.

The most active gold contract for December delivery was up 2.1 U.S. dollars, or 0.2 percent, to finish at 1,187.5 dollars.

China's central bank said in a statement Tuesday that China would allow more commercial banks to import and export gold and encourage them to offer yuan-denominated gold derivatives, in order to expand the development of gold markets.

China's move to broaden its gold markets has pushed up gold price, as it was the main producer and second largest gold consumer.

The U.S. Commerce Department said Tuesday that the consumer spending and income remain unchanged in June, but factory order dipped more than predicted. The pending home sales also dropped in June, according to National Association of Realtors.

Euro continued to surge against dollar on Tuesday, as a batch of disappointing U.S. economic data unsettled investors and heavily weighed on dollar. The weaker dollar made dollar-priced bullion more affordable for buyers of other currencies, and boosted gold's appeal as an alternative investment.

September silver was up 0.3 cents, to settle at 18.422 dollars per ounce while October platinum dipped 15.1 dollars, or 0.9 percent, to settle at 1,587.1 dollars per ounce.



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