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Gold prices rise as dollar, global stocks ease
Paulson cuts gold bets; Soros rushes back in

May 17 Gold prices rose on
Tuesday, reversing earlier losses after a weaker dollar and
falling stock markets spurred safe-haven buying of the precious
metal.
Spot gold was trading 0.4 percent higher at $1,278.7
per ounce at 11:17 a.m. EDT (1517 GMT), while U.S. gold futures
were also up 0.55 percent at $1,281.20.
Profit-taking led to a drop in gold prices earlier in the
session, as stock markets temporarily edged higher.
European shares hit a two-week high, bolstered by a rally in
mining stocks, but eased later in the session. The dollar
slipped to trade 0.2 percent lower against a basket of six major
currencies, giving a boost to gold.
A weaker U.S. currency makes dollar-denominated gold cheaper
for holders of other currencies.
The U.S. government reported earlier on Tuesday that
consumer prices recorded their biggest increase in more than
three years in April as gasoline and rents rose, pointing to a
steady inflation build-up that could give the Federal Reserve
ammunition to raise interest rates later this year.
Other U.S. data on Tuesday showed housing starts and
industrial production rebounded strongly last month, suggesting
the economy was regaining steam early in the second quarter.
Long-dated yields fell, with the 10-year note reversing
earlier gains and the 30-year bond falling to session lows after
the data. Gold, which pays no interest, also rose after strength
in the benchmark 10-year U.S. Treasury yield waned.
"Everyone is really waiting to see whether the U.S. economy
does pick up in Q2, as it often does, and the narrative over the
Fed shifts again," Macquarie analyst Matthew Turner said.
Gold has rallied 20 percent this year on speculation the Fed
has slowed its expected pace of rate increases on concerns about
the volatility of global markets.

http://www.reuters.com/article/global-precious-idUSL2N18E0VF