Gold prices rebound as dollar slips
NEW YORK — Gold prices rebounded Monday, moving higher as the dollar slipped against other currencies.
The dollar was lower against the British pound and the euro on Monday as demand for the safety of the U.S. currency subsided along with swine flu fears. Last week, the dollar had gained on worries that a global pandemic could derail an economic recovery.
The dip in the dollar aided the gains in gold, which is used as a hedge against inflation and a weak greenback.
Meanwhile, better-than-expected reports on the housing and construction industries helped push other metals and oil prices higher.
An industry trade group said pending sales of U.S. homes rose more than expected, marking a second straight month of gains. Construction spending also rose unexpectedly in March after five months of declines.
Investors have been more optimistic in the past two months about the prospects for an economic recovery as an increasing amount of data comes in better than expected. Investors took Monday’s reports as the latest signs that the economy has begun to heal. And if the economy is improving, demand for raw materials will increase.
“(Gold is) going to gain ground when the dollar is under pressure and you see commodities doing well across the board and so certainly gold is going to benefit from that,” said Dave Meger, gold analyst at Alaron.
Gold for June delivery rose $14 to settle at $902.20 an ounce on the New York Mercantile Exchange. The precious metal lost nearly 3 percent last week.
July silver soared 61.3 cents to $13.1130 an ounce, while July copper futures added 4.3 cents to $2.1440 a pound.
Analysts were also quick to note that the gains among metals futures could have been skewed by the relatively thin trading volume on Monday due to the fact that some markets in the U.K. were closed for a holiday.
On Wall Street, stocks soared on the better-than-expected economic data. The Dow Jones industrials and the Standard & Poor’s 500 index jumped more than 2 percent in afternoon trading.
Energy prices jumped on the Nymex, boosted in part by upbeat economic signs from China. A report showing improving conditions in the country’s manufacturing sector signals demand for energy could pick up.
Light, sweet crude for June delivery rose $1.27 to settle at $54.47 a barrel.
Gasoline for June delivery added 4.7 cents to $1.5646 a gallon and heating oil rose 3 cents to $1.42 a gallon.
Grain prices were mostly lower on the Chicago Board of Trade.
July wheat futures lost 19 cents to $5.51 a bushel, while corn for July delivery slipped 8.25 cents to $4.0550 a bushel.
July soybeans gained 12.5 cents to $11.0350 a bushel.
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