Gold rallies for the week, ending slump

AP News
Posted: Oct 14, 2011 3:47 PM
Gold rallies for the week, ending slump

Gold is ended higher for the week. Some traders worried that gold would continue falling from the record high it reached this summer.

Gold for December delivery closed at $1,683 an ounce Friday. That's about 1 percent higher than Monday's price of $1670.80.

The price of gold hit a record high of $1,891.90 an ounce on Aug. 22. Prices have fallen steadily since then. In early October, Credit Suisse analysts warned the summer's rally in gold prices looked "over-exuberant" in hindsight. That report stoked worries of a crash in gold.

This week's gains suggest that gold may not fall below $1,650 any time soon, said RBC Global Futures analyst George Gero.

Gold demand remains strong in part because of economic stimulus efforts in Europe and the United States, Gero said. European finance ministers are preparing plans to bail out banks and indebted nations in the region, while the U.S. Federal Reserve Bank is keeping interests rates historically low. Both mean that inflation could increase in the future, Gero said. That makes gold attractive, because many traders buy precious metals as a way to protect against inflation.

That demand could push gold prices back into the $1,700 range within the next few trading days, Gero said. "It looks like we have a higher trading range now for gold," he said.

December silver rose 50.6 cents, or 1.6 percent, to close at $32.173. Copper for December delivery rose 10.15 cents, or 3 percent, to end at $3.4085 a pound.

January platinum rose $22.50, to finish at $1,554.90 an ounce. December palladium gained $26.45, or 4.5 percent, to $620.55 an ounce.

In other trading, December wheat gained 4.75 cents, or less than 1 percent, to finish at $6.2275 per bushel. December corn rose 1.75 cents, or less than 1 percent, to end at $6.40 per bushel.

Oil prices rose. Benchmark oil jumped $2.57, or 3 percent, to end at $86.80 per barrel on the New York Mercantile Exchange.

Heating oil rose 8.44 cents to finish at $3.0558 per gallon, gasoline futures gained 6.72 cents to $2.8347 per gallon and natural gas rose 17.2 cents to $3.703 per 1,000 cubic feet.


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