Gold, Metal Prices Rally as Dollar Weakens

by Bullion Prices Staff on March 16, 2010

US gold prices surged on Tuesday as the dollar weakened against other world currencies and oil prices advanced the most in four weeks. The yellow metal gained further following the Federal Reserve’s announcement to keep interest rates unchanged for an extended period of time. New York gold settled up 1.5%. Other metals climbed also, with silver advancing 1.4% and platinum rising 0.9%.

In New York precious metals prices, April gold jumped $17.10 to end at $1,122.50 an ounce. It ranged from $1,108.10 to $1,128.10. May silver rose 24.6 cents to finish at $17.354 an ounce. April platinum advanced $14.90 to $1,630.70 an ounce.

"It’s not a case of a weak dollar and strong euro. It’s the fact that currencies in general are not very attractive right now, and that will remain a major benefit going forward," Bill O’Neill, managing director at LOGIC Advisors, said on Reuters. "Gold is assuming the role of currency of choice. Gold’s ability to move independently in the wake of negative currency moves is a very positive sign."

In PM London bullion prices, gold was fixed to $1,124.75 an ounce for a gain of $20.50. Silver rose 22 cents to $17.240 an ounce. Platinum settled $8.00 higher to $1,624.00 an ounce.

"Fundamentally, platinum looks better than gold," Steven Zhu, head trader at Shanghai Tonglian Futures Co., said on Bloomberg. "When the economy recovers, auto demand recovers. The launch of new exchange traded funds linked to platinum has also greatly increased investment demand."

New York crude oil for April delivery rose $1.90, or 2.4%, to $81.70 a barrel. Gold, considered a hedge during times of high inflation and economic uncertainty, tends to follow oil and move opposite to the U.S. dollar.

In silver coin news, the U.S. Mint officially set the launch date for the collector proof and uncirculated Boy Scouts Silver Dollars for March 23. The coins are struck from 90 percent silver and 10 percent copper, and are limited to a mintage of 350,000. The public may order the coins on the Mint website (http://www.usmint.gov/) at noon ET on the 23rd. The silver coins celebrate the 100th anniversary of the founding of the Boy Scouts of America.

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