Gold up on weak US dollar

Chicago, Aug 22 (IANS) Gold futures on the COMEX division of the New York mercantile exchange rose on Friday on a weaker US dollar and lower equities.

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The most active gold contract for December delivery rose $6.4 (0.55 percent) to settle at $1,159.60 per ounce, reported Xinhua news agency.

For the week, gold futures climbed 4.21 percent, their largest weekly gain since the week ended on January 16 this year.

Gold was given support as US equities fell and the US dollar index fell also. The index is a measure of the dollar against a basket of major currencies.

Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

The weak equities and weaker dollar are influenced by the US central bank’s strong hints that the federal reserve interest rate will not be raised in September.

An increase in the Fed’s interest rate drives investors away from gold and towards assets with a return, as the precious metal bears no interest.

There has not been an increase in the Fed’s interest rate since June 2006, before the beginning of the American financial crisis.

Silver for September delivery fell 21.6 cents (1.39 percent) to close at $15.301 per ounce.

Platinum for October delivery dropped $7.8 (0.75 percent) to close at $1,027.10 per ounce.

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