Gold gains at US dollar weakens Matt Whittaker From: Dow Jones Newswires December 24, 2009 7:23AM Increase Text SizeDecrease Text SizePrintEmail Share
Add to DiggAdd to del.icio.usAdd to FacebookAdd to KwoffAdd to MyspaceAdd to NewsvineWhat are these?A WEAKER US dollar pushed gold to a higher settlement in New York today as investors found the metal's recent pullback to be a buying opportunity.
Benchmark February gold futures rose $US7.30 to settle at $US1094 an ounce on the Comex division of the New York Mercantile Exchange. Shortly after gold closed, the US Dollar Index was down 0.449 point at 77.801 points
Gold "was kind of oversold to some degree," said Stephen Platt, analyst with Archer Financial Services. "You're seeing some bargain hunting buying."
Higher crude oil prices also helped gold, he said.
KEY COMMODITY PRICES: oil. gold, base metals, livestock and wheat
In addition to the weaker US dollar, gold was bouncing off support levels around $US1075, said Larry Young, senior trader with Infinity Futures. The February gold contract dipped as low as $US1075.20 yesterday. That's off its December 3 record high of $US1227.50.
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Gold's pullback has come in part as investors have bought the US dollar amid growing confidence in the economic recovery and expectations the Federal Reserve will raise interest rates earlier than expected.
That would create a more difficult environment for rising gold prices because it would mean a curtailing of the easy money policy of near-zero interest rates that has helped boost gold this year.
Also, US dollar-denominated assets like gold often trade inversely to the greenback because US dollar movements make them more or less expensive for those using other currencies.
In the New York session, investors took profits from the greenback's recent rally after the Commerce Department said that sales of single-family homes decreased 11.3 per cent to a seasonally adjusted annual rate
