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Gold Prices Rise; Dollar Is Mixed

One euro was buying $1.594 recently, up from $1.58 on Friday.

The U.S. currency was weakening against the euro and the yen Monday following the announcement of

a big writedown and increased provision for credit losses


Bank of America

(BAC) - Get Bank of America Corporation Report


One euro was buying $1.594 recently, up from $1.58 on Friday. The dollar was worth 103.2 Japanese yen, down from 103.9 yen previously.

The BofA news raises further concerns that the continuing troubles in the banking sector will spread to the wider economy and slow growth in the U.S. As a result, the

Federal Reserve

will probably lower rates again, many analysts believe. That could mean lingering pressure on the greenback.

The British pound, however, was slipping in value against the dollar, with one pound selling for $1.9832 vs. $1.9933 in the prior session. The Bank of England, Britain's equivalent of the Fed, said it will swap high-grade mortgage-backed securities for government issued treasury bills in an effort to ease the credit crisis.

The currency exchange-traded funds were following action in the wholesale foreign-exchange market. The

CurrencyShares Euro Trust

(FXE) - Get Invesco CurrencyShares Euro Trust Report

and the

CurrencyShares Japanese Yen Trust

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(FXY) - Get Invesco Currencyshares Japanese Yen Trust Report

were rising 0.8% and 0.2%, respectively.


CurrencyShares British Pound Sterling

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

was off 0.6%.

In the metals market, gold prices were rising, driven up by the weaker dollar and the added financial uncertainty surrounding the problems at BofA. Benchmark bullion futures were tacking on $5.60 at $920.80 an ounce in recent action on the Comex division of the New York Mercantile Exchange.

The biggest of the bullion exchange-traded funds,

streetTracks Gold Shares

(GLD) - Get SPDR Gold Shares Report

, was steady.

As for the precious metals patch, shares of


(IAG) - Get Iamgold Corporation Report

were tumbling 6.9% following new legislation in Ecuador that temporarily suspends large-scale mining exploration, according to an announcement by the firm.

Shares of

Newmont Mining

(NEM) - Get Newmont Corporation Report

were lower by 1.2%, pulled down by the general market despite the relative strength in metal prices.