Gold dips on rising dollar, ahead of Fed statement

08:27, August 11, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange fell below 1,200 dollars per ounce on Tuesday after the U.S. dollar surged ahead of the Fed's latest statement on U.S. economic recovery. Silver and platinum both softened.

The most active gold contract for December delivery decreased 4. 6 dollars, or 0.4 percent, to finish at 1,198.0 dollars per ounce.

The dollar extended gains for the second consecutive session on Tuesday on investors' worsening concerns about a sluggish global recovery. Investors, who expected the Fed to take further steps to bolster the economy and keep the benchmark interest rate unchanged, fled the euro and other risky currencies to the perceived safety of dollar, and sent dollar to its highest level this month.

The strong rally in the dollar has diminished the demand for the metal and dragged down the gold price, since gold is traditionally used as a hedge against inflation and a weaker dollar.

September silver dipped 8.4 cents, or 0.5 percent, to settle at 18.158 dollars per ounce, October platinum lost 5.9 dollars, or 0. 4 percent, to settle at 1,537.0 dollars per ounce.



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