Gold inches higher while other commodities decline

AP News
|
Posted: Nov 24, 2009 4:20 PM

Gold prices managed to carve out a small gain Tuesday, while other commodities fell after the latest economic data signaled that the recovery will be slow.

A rise in the dollar also hurt demand for commodities, making them more expensive to foreign buyers.

Commodities like silver, copper and oil retreated after the Commerce Department revised lower its reading on third-quarter economic growth, saying the nation's gross domestic product rose 2.8 percent, down from an initial estimate of 3.5 percent.

Meanwhile, the Conference Board said its Consumer Confidence Index increased slightly to 49.5 in November from 48.7 in October. The reading was better than economists expected, but indicates that consumers are wary as they head into the holiday season.

Demand for gold held up as investors looked for safe places to park their cash. Gold is seen as both an alternative to a weak dollar and a safe-haven investment because of its stable store of value. That has helped drive gold prices to record highs this year.

Gold for December delivery inched up $1.10 to settle at $1,165.80 an ounce on the New York Mercantile Exchange. On Monday, prices hit a fresh high of $1,174 an ounce.

The day's mixed economic news was favorable to gold, as it supported the Federal Reserve's low interest rate policy. Low interest rates are a good economic support, but they have a tendency to weaken a country's currency as investors look for higher returns in other assets.

The economic reports hurt other commodities that will depend on a strong recovery to drive demand. Silver and copper retreated from their highest levels of the year.

December silver fell 15.5 cents to $18.494 an ounce, while March copper futures fell 1.85 cents to $3.1435 a pound.

December platinum dropped $21.10 to $1,443.30 an ounce.

Energy prices also fell on the Nymex.

Light, sweet crude for January delivery lost $1.54 to $76.02 a barrel. Gasoline futures shed 4.04 cents to $1.939 a gallon, while heating oil futures fell 3.02 cents to $1.9497 a gallon.

On the Chicago Board of Trade, March wheat futures fell 25 cents to $5.535 a bushel, while March corn fell 11.25 cents to $3.92 a bushel.

January soybeans rose 4 cents to $10.46 a bushel.

Among other soft commodities, December coffee slipped 0.25 cent to $1.3605 a pound, while January sugar fell 0.06 cent to 21.51 cents per pound. December cocoa fell $37 to $3,205 a ton.