Gold climbs on lower oil, higher dollar
Singapore, May 30, 2008
Gold edged up on Friday, recouping some of the losses of the previous session when it fell by more than 2 percent on tumbling oil prices and a rising dollar.
Spot gold stood at $878.25/879.25 an ounce by 11:29 p.m. EDT, up from $877.85/879.25 an ounce late in New York on Thursday.
Gold fell to a two-week low on Thursday, dragged down by oil prices that continued to retreat from last week's record highs, and a stronger dollar that has risen to close to a three-month high against the yen.
'The U.S. dollar was firmer and oil prices were weaker. These influenced gold prices because of their impact on investment flows and inflation expectations,' said David Moore, an analyst with Commonwealth Bank of Australia in Sydney.
The bullion is often sought after for its appeal as an alternative currency and hedge against inflation, and tends to move in an opposite direction to the dollar.
The U.S. dollar was quoted at 105.45/105.49 yen on Friday, hovering near a three-month high of 105.88 yen struck on Thursday after an upward revision to U.S. economic growth figures added to evidence that the United States may stave off recession and underscored expectations for the Federal Reserve to raise interest rates this year.
The U.S. economy grew a bit faster than initially thought in the first quarter, with gross domestic product up a 0.9 percent annual rate, against earlier estimates calling for an anemic 0.6 percent rate.
'Over the next few months, gold could remain very volatile as it is influenced very much by movements in the U.S. dollar, which will in turn be influenced by perceptions of the outlook for the U.S. economy,' Moore added.-Reuters