Gold, silver rise on uncertainty in Europe

AP News
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Posted: Jul 22, 2011 4:15 PM
Gold, silver rise on uncertainty in Europe

Precious metals prices rose Friday on concerns that a new financial rescue plan for Greece won't end uncertainty over the debt crisis in Europe.

Metals prices have risen throughout the year as investors worry that Europe's debt problems could spread. Investors buy gold and silver contracts when they want a relatively safe place to park money when other markets are volatile.

European leaders struck a deal to help Greece manage its debt, but analysts say the pact doesn't mean the crisis is over. European governments still face years of paying down their debts.

While there was initial optimism this week about the deal, metals traders are not yet convinced that the plan will calm credit markets in the long run.

"I think people are having a second look at (the deal) and seeing if there are any weaknesses in the some of the proposals," said Edward Meir, an analyst at MF Global in New York.

Silver for September delivery rose $1.175 Friday to settle at $40.122 an ounce. August gold rose to $14.50 to $1,601.50 an ounce.

Copper for September delivery rose 2.65 cents to settle at $4.41 cents a pound. October platinum rose $10.60 to $1,798.40 an ounce and September palladium fell $2.60 to $806.40 an ounce.

Crop prices rose on concerns that warm weather will hurt this year's output. Traders are watching for any signs of bad weather this summer. Backup supplies of corn, soybeans and wheat are at historically low levels. Any shortage in this fall's harvest could tighten supplies and push prices higher.

The U.S. Department of Agriculture will release a report Monday on the status of this year's crop. Hot weather that has hung over the Midwest this month could results in lower yields.

Corn for December delivery rose 12.5 cents to $6.855 a bushel.

September wheat rose 15 cents to $6.9225 a bushel and November soybeans rose 0.25 cents to $13.8825 a bushel.

Energy prices rose.

Benchmark crude for September delivery rose 74 cents to settle at $99.87 a barrel on the New York Mercantile Exchange.

In other Nymex contracts, heating oil rose 2.86 cents to settle at $3.1415 per gallon, gasoline rose 3.39 cents to $3.0906 per gallon and natural gas rose 0.8 cents to $4.37 per 1,000 cubic feet.