Gold prices inch up after 4 days of losses

AP News
|
Posted: Dec 10, 2009 4:35 PM

Gold rebounded Thursday as a weaker dollar lured investors back after four days of declines.

Gold for February delivery added $5.30 to settle at $1,126.20 an ounce on the New York Mercantile Exchange. Prices have slumped since hitting a record high of $1,227.50 a week ago as the dollar strengthened.

Signs of improvement in the economy have driven the dollar higher in recent days as investors bet that the Federal Reserve could raise interest rates sooner than later. At the same time, investors have been adding safe-haven assets like the dollar to their portfolios to protect the gains they've amassed during the stock market's rally this year.

Gold is used as a hedge against a weak greenback, so it loses its appeal when the dollar is stronger. Other commodities become more expensive to foreign buyers when the dollar rises.

On Thursday, the dollar fluctuated but turned weaker by early afternoon.

Other metals were mixed. March silver inched up less than a penny to $17.188 an ounce, while December platinum rose $15.30 to $1,424.50 an ounce.

March copper futures slipped 2.05 cents to $3.103 a pound.

Elsewhere on the Nymex, natural gas prices surged 8 percent as the government reported a drop in supplies for the first time in nine months and winter storms spread across the U.S. Natural gas rose 40 cents to settle at $5.298 per 1,000 cubic feet.

Oil prices, however, fell for the seventh straight day, dropping below $70 a barrel for the first time since October.

After surging to more than $80 a barrel in October on the back of a weaker dollar, oil prices have retreated as concerns about weak demand levels resurface.

Light, sweet crude for January delivery fell 13 cents to $70.54 a barrel, after earlier falling as low as $69.81.

Gasoline futures fell 2.22 cents to $1.8351 a gallon, while heating oil futures dipped less than 1 cent to $1.9029 a gallon.

On the Chicago Board of Trade, March wheat futures rose 1.75 cents to $5.37 a bushel, while March corn rose 9.5 cents to $3.93 a bushel.

January soybeans slipped 1.5 cents to $10.27 a bushel.

Other soft commodities, including coffee, sugar and cocoa, rose.