Gold prices slightly higher as dollar falls
NEW YORK — Gold prices rose slightly Tuesday, aided by a falling dollar. Other commodities, like grains and energy futures, were also higher.
The dollar was lower against the euro and the British pound Tuesday, which boosted gold prices. The precious metal is used as a hedge against inflation, which can be triggered by a weak currency, so it often moves opposite the dollar.
Gold for June delivery added $10.40 to settle at $923.90 an ounce on the New York Mercantile Exchange.
Still, the metal remains largely range-bound. Though investors have been more upbeat in recent weeks about the prospects for an economic rebound, which could lead to inflationary pressures and ultimately benefit gold, there is still some hesitance in the market.
“You might have thought gold would have been doing a bit better under the current circumstances, given the strong move against the dollar,” said Philip Klapwijk, chairman of London-based GFMS Ltd., a precious metals research firm. “We’re at a trading range in gold at the moment, and it’s almost as if something new is required to punch gold a bit higher.”
July silver jumped 30.5 cents to $14.2150 an ounce, while July copper futures slipped less than 1 penny to $2.0860 a pound.
With little corporate or economic news, stocks struggled to find a direction Tuesday, fluctuating throughout much of the day as some traders worried that the economic recovery might not be as quick as hoped.
Oil prices briefly topped $60 a barrel Tuesday, hitting that mark for the first time since early November. Prices have been rising in recent weeks on the hope that energy demand will soon pick up as the economy shows some early signs of improvement.
After wavering a bit, light, sweet crude for June delivery closed up 35 cents to $58.85 a barrel.
In other Nymex trading, gasoline futures fell 1.23 cents to $1.6679 a gallon, while heating oil futures rose less than 1 cent to $1.5070 a gallon.
Grain prices were slightly higher on the Chicago Board of Trade after the U.S. Department of Agriculture released figures on crop production.
Senior analyst Darrell Jobman of TraderPlanet said the numbers were largely mixed. Wheat production estimates came in a little lower than average trade forecasts. But USDA projections for global production and carryover for 2009 to 2010 are larger than they were a year ago, he said.
July wheat futures added 2 cents to $5.9275 a bushel, while corn for July delivery rose 6.25 cents to $4.2750 a bushel.
July soybeans inched up 1.5 cents to $11.1750 a bushel.
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