Gold Prices Climb; Dollar Pulls Back

Gold futures are ahead by $10.50 at $928.50 an ounce.
Author:
Publish date:

Gold prices jumped Wednesday after new economic data caused the greenback to weaken against the other major currencies. A spike in oil prices also helped.

Benchmark gold futures were ahead $10.50 at $928.50 an ounce in recent action on the Comex division of the New York Mercantile Exchange.

The bullion exchange-traded funds, the

streetTracks Gold Shares

(GLD) - Get Report

and the

iShares Comex Gold Trust

(IAU) - Get Report

, were each ahead by almost 1%.

The Department of Commerce said wholesale inventories expanded much more than expected in February. January's figure was also revised upward. Traders interpreted the data as a further indication of a weakening U.S. economy.

The news sent the dollar down, resulting in a rally in bullion prices. Over time, the value of the U.S. dollar tends to move in the opposite direction to that of gold.

Oil prices were also up, recently higher by $2.35 at $110.85 a barrel. The cost of oil is seen as a key driver of inflation, and a rise in the cost of crude can prompt more bullion buying by investors seeking a hedge against the asset-withering effects of rising consumer prices.

In the precious metals patch,

Barrick Gold

(ABX)

and

Newmont Mining

(NEM) - Get Report

were rising 1.6% and 1.4%, respectively.

Yamana Gold

(AUY) - Get Report

was up 1.8%.

Among currencies, one euro was buying $1.5776 vs. $1.5719 a day earlier. One dollar was buying 102.30 Japanese yen, down from 102.50 yen previously. The British pound was trading at $1.9738, up from $1.9689.

The currency exchange-traded funds were moving in line with action in the foreign-exchange market.

CurrencyShares Euro Trust

(FXE) - Get Report

was up 0.5%, while the

CurrencyShares Japanese Yen Trust

(FXY) - Get Report

was ahead 0.4%.

CurrencyShares British Pound Sterling

(FXB) - Get Report

was marked higher also, rising 0.3%.