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Dollar Weakness Helps Lift Gold

Benchmark bullion futures rise $16.10 to close at $874.10 an ounce.

Near-term gold prices in the U.S. jumped Monday as the dollar pulled back.

Benchmark bullion futures rose $16.10 to close at $874.10 an ounce on the Comex division of the New York Mercantile Exchange. The

streetTracks Gold Shares

(GLD) - Get SPDR Gold Trust Report

exchange-traded fund, which holds bars of gold, was gaining 1.6%.

The value of gold has pulled back substantially in recent weeks after reaching an all-time high of around $1,030 March 17 at the height of the banking crisis when

Bear Stearns

(BSC)

was rescued by

JPMorgan Chase

(JPM) - Get JPMorgan Chase & Co. (JPM) Report

after a near-collapse. At least part of the story in the retreat in gold prices has been a strengthening U.S. dollar, the value of which tends to move in the opposite direction to that of gold.

The other piece of the tale has been the liquidation of gold holdings by the streetTracks Gold Shares. The fund has seen redemptions of about 84 tons, a large quantity for the relatively illiquid bullion market, since mid-April, as investors have grown more sanguine about the problems plaguing the credit markets.

As for the precious metals patch, shares of

Eldorado Gold

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(EGO) - Get Eldorado Gold Corporation Report

and

Kinross Gold

(KGC) - Get Kinross Gold Corporation Report

were both ahead more than 4%, buoyed by the rallying gold price.

In the currency markets, one euro was buying $1.5496, up from $1.5414 on Friday. The dollar was buying 104.76 Japanese yen, down from 105.20 yen previously. The British pound was selling for $1.971 vs. $1.974.

The

CurrencyShares Euro Trust

(FXE) - Get Invesco CurrencyShares Euro Trust Report

and the

CurrencyShares Japanese Yen Trust

(FXY) - Get Invesco Currencyshares Japanese Yen Trust Report

were both up 0.5%. The

CurrencyShares British Pound Sterling

(FXB) - Get Invesco CurrencyShares British Pound Sterling Trust Report

was off 0.2%.