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Precious metals rise on dollar weakness

Gold managed to rise for the second day in a row as the Greenback fell

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Gold rose US$5 yesterday, gained US$6 on Wednesday to US$1,081.

Precious metals regained some of the ground lost in recent days as the dollar continued to weaken ahead of next week’s Federal Reserve meeting.

The respite meant that gold managed to rise for the second day in a row.

The greenback fell around 0.7% against a basket of other currencies today, boosting the metal, which is priced in dollars.

A weaker dollar lifts the appeal of dollar-denominated precious metals like gold, making them cheaper to buyers using other currencies.

Last week the dollar rose on the expectation that the Fed will raise  interest rates next month - an event that would hit gold as it is a non-interest yielding asset - but the US currency has slipped back slightly this week.

Also lifting the metal was Bloomberg recorded slight inflows into the gold exchange traded funds for the first time in 14 days of trading yesterday.

The metal, which rose US$5 yesterday, gained US$6 on Wednesday to US$1,081.

In other news, platinum and palladium both managed a rare foray into the green.

The precious metals, which are used primarily for catalytic converters in the automotive industry, have improved on the Chinese government’s plans to roll out a nationwide car buying incentive scheme.

“According to industry sources, consumers in rural regions will be encouraged to buy cars with low gasoline consumption,” Commerzbank said.

Platinum gained US$12 or around 1.5% to US$860 while palladium rose almost 1% to US$553.

Elsewhere, silver climbed 1% to US$14.31.

 

Major Movers

Randgold Resources up 145p to 4,206p

Fresnillo up 5p to 674p

Anglo American down 3p to 320p

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