Tags: US | Commodities | Review

Gold Rises Above $1,100 on Weaker Dollar

Friday, 26 Mar 2010 05:12 PM

Gold led metals prices higher Friday as the dollar grew weaker against other currencies after European leaders put a plan in place to help Greece with its financial problems.

Metals prices also benefited from a government report showing the U.S. economy grew at a 5.6 percent pace in the October-to-December quarter. Much of the growth, the Commerce Department said, came from a boost in manufacturing.

The euro rose against the dollar after concerns about Greece eased with the announcement of a plan by European nations late Thursday to provide a safety net to Greece. Markets have been punishing the euro in recent months as Greece's fiscal crisis raised concerns that European countries might not be able to correct their own fiscal problems.

The ICE Futures US dollar index, which measures the dollar against the euro and five other currencies, fell 0.47 percent after reaching its highest level in 10 months earlier in the week.

"Base metals rallied today, encouraged by European leaders' agreeing to a backstop rescue package for Greece," RBC Global Futures analysts stated in an afternoon report.

Gold and other commodities often trade in the opposite direction of the dollar. A weaker dollar makes commodities, which are priced in dollars, more attractive to overseas buyers.

In addition, investors see gold as a hedge against inflation and the dollar.

Gold for June delivery rose $11.30 to settle at $1,105.40 an ounce. In May contracts, silver rose 16.5 cents to $16.906 an ounce and copper rose 2.25 cents to $3.403 a pound.

In the energy sector, natural gas for April delivery fell for a fourth consecutive day, settling down 10.9 cents at $3.872 per 1,000 cubic feet on the New York Mercantile Exchange.

In other Nymex trading, benchmark crude for May delivery fell 53 cents to $80 a barrel amid a plentiful supply. April heating oil rose 0.04 cent to $2.0697 a gallon and April gasoline fell 1.03 cent to $2.2074.

Grains were mixed. Wheat for May delivery fell 1.75 cents to settle at $4.6475 a bushel.

Soybeans for May delivery rose 9.5 cents to $9.52 a bushel and corn rose 1.25 cents to $3.5625 a bushel.

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Gold led metals prices higher Friday as the dollar grew weaker against other currencies after European leaders put a plan in place to help Greece with its financial problems.Metals prices also benefited from a government report showing the U.S. economy grew at a 5.6 percent...
US,Commodities,Review
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2010-12-26
Friday, 26 Mar 2010 05:12 PM
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