PRECIOUS METALS: Gold futures rise on stronger oil, weaker dollar
Gold futures gained more than $11 an ounce on Wednesday, as the dollar tumbled, boosting the investment appeal of the precious metal.
Gold for December delivery climbed $11.10, or 1.4 percent, to close at $816.80 an ounce on the New York Mercantile Exchange. The precious metal had fallen to a low of $792 an ounce earlier, its lowest intraday level since October.
On Monday, gold rebounded from last week's drop of more than 8 percent and gained $13.60, or 1.7 percent, to close at $805.70 an ounce.
The metal followed oil prices higher Tuesday, with crude futures climbing to a high near $116 a barrel after a three-session decline of 2.7 percent.
"The primary trends in oil and the dollar remain up and down, respectively -- which should result in gold being well supported above $750 per ounce," said Mark O'Byrne, a director at Gold and Silver Investments Ltd.
"While oil may continue to sell off, few expect it to fall much below $100, levels considered extremely high only a few short months ago," he said.
"More consolidation in the gold market looks necessary and a weekly close above $850 will be needed prior to the primary trend reasserting itself," he said.
<b>Dollar Trading</b>
The dollar erased earlier gains, loosing as much as 0.7 percent against the euro. Gold reached a record in March as interest-rate cuts drove the euro to an all-time high against the U.S. currency.
A weakness in the greenback boosts the investment appeal for gold. The dollar index, which tracks the dollar against a trade-weighted basket of six major currencies, was at 76.85, down from 77.070 late Monday. It climbed as high as 77.41 during the day.
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