Gold retreats as dollar rises; Crude oil gains

AP News
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Posted: Dec 22, 2009 5:08 PM

The price of gold fell further Tuesday, touching its lowest level since November as the dollar strengthened.

Gold for February delivery lost $9.30 to settle at $1,086.70 an ounce on the New York Mercantile Exchange, after earlier falling as low as $1,075.

Investors have been selling gold in recent weeks, reversing a monthslong trend of higher prices, as the dollar gains ground against other currencies. Investors have been buying dollars, betting that the economic recovery will be stronger in the U.S. than in Europe and parts of Asia. Gold is considered a hedge against a weak greenback, so the stronger dollar makes the metal less appealing to investors.

Gold has fallen 11.5 percent since hitting a record high of $1,227.50 an ounce on Dec. 3. The ICE Futures U.S. dollar index, which measures the dollar against other currencies, has risen 4.6 percent during that time.

Other metals also declined Tuesday. March silver gave up half a cent to $17.03 an ounce, while March copper futures lost 2.05 cents to $3.138 a pound.

January platinum dropped $26.60 to $1,396.90 an ounce. Palladium also fell.

Oil prices reversed early declines and moved slightly higher on the Nymex. Light, sweet crude for February delivery rose 68 cents to settle at $74.40 a barrel.

Earlier Tuesday, the Organization of Petroleum Exporting Countries decided to leave production levels unchanged, which may stabilize energy prices. Crude prices have fallen about $10 a barrel in two months.

In other Nymex trading, gasoline rose 1.97 cents to at $1.8888 per gallon and heating oil rose less than a penny to $1.9486.

On the Chicago Board of Trade, March wheat futures added 3.5 cents to $5.23 a bushel, while March corn fell 1.25 cents to $3.9875 a bushel.

March soybeans fell 10 cents to $9.985 a bushel.

Among other soft commodities, cotton and coffee fell, while sugar rose.