Gold, Little Changed, May Increase as Dollar Falls Against Euro

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Commodities - Commodity News

Gold, little changed in Asia, may gain as the dollar weakened against the euro, boosting demand for the precious metal as an alternative investment. The dollar declined as gains in equities sapped demand for the U.S. currency and on prospects European Central Bank President Jean-Claude Trichet will today signal policy makers will refrain from lowering borrowing costs. “As the dollar gains and the other commodities stabilize, we may see gold continue to hold above $900,” Yide Futures Brokerage Co. analyst Yang Zhenqiang said today from Tianjin. Gold for immediate delivery traded at $914.39 an ounce at 9:36 a.m. in Singapore compared with $913.05 on July 10. Bullion for August delivery on the Comex division of the New York Mercantile Exchange was at $914. Crude oil, which dropped to an eight-week low last week, traded little changed at more than $60 a barrel. An output disruption in Nigeria, Africa’s biggest oil producer, may keep prices from falling, traders said. Gold tends to rise in tandem with oil as investors buy the metal as an inflation hedge. Still, 21 of 32 traders, investors and analysts surveyed by Bloomberg News, or 66 percent, said bullion would fall this week. Five people forecast higher prices and six were neutral. The dollar weakened to $1.3959 per euro from $1.3936 in New York on July 10. Among other precious metals for immediate delivery, silver was little changed at $12.6938 an ounce, platinum rose 0.5 percent to $1,116 an ounce and palladium dropped 0.6 percent to $233.75 an ounce as of 9:35 a.m. in Singapore.

Source: Bloomberg


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