Gold Prices Rise As Dollar Falls

By LAUREN VILLAGRAN
The Associated Press

NEW YORK - Gold prices jumped Thursday as the euro climbed to a fresh peak against the U.S. dollar amid concerns about the strength of the U.S. economy.

Elsewhere, commodities prices finished mixed.

"The dollar and oil took turns propelling bullion values throughout the day," said Jon Nadler, an analyst with Kitco Bullion Dealers, in a client note.

August gold rose as high as $671 an ounce in intraday trading on the New York Mercantile Exchange, then ended the session up $6.20 at $668.30 an ounce.
Gold found support in a declining U.S. dollar, as investors sought a so-called safer haven for their funds. The euro bought $1.379 in late trading.

September silver picked up 20.5 cents to close at $13.18 an ounce.

Energy prices shed some weight as several refineries restarted operations, raising expectations for increased gasoline output. Inventories of gasoline showed larger-than-expected growth last week, according to a Wednesday report from the Energy Information Administration.

Light, sweet crude oil initially leaped more than $1, then eased to close down 6 cents at $72.50 a barrel. Gasoline prices shed 4 cents to settle at $2.2663 a gallon.

At the Chicago Board of Trade, traders of wheat, corn and soybeans responded to dry weather patterns in parts of the Midwest and a report on world supply and demand from the U.S. Department of Agriculture.

Forecasts for dry conditions in the western Corn Belt bolstered corn prices as the crop enters its crucial pollination stage. December corn added 9.6 cents to close at $3.65 a bushel.

The USDA on Thursday cut its production estimate for hard, red winter wheat , the wheat used in cereals and bakery goods , by 7 percent and raised its forecast for price to farmers to an all-time record of $5.10 a bushel. The agency also boosted its estimates for corn production 22 percent to 12.84 billion bushels, up from 10.54 billion a year ago.

"The reality of these numbers was already incorporated into the market," said DTN analyst Gary Wilhelmi.

Wheat prices edged 0.4 cent lower to close at $6.214 a bushel. Soybeans gained 18.6 cents to finish at $9.414 a bushel.

Overseas, industrial metals ended the session mostly lower, with declines in copper, aluminum and tin on the London Metal Exchange. Lead finished flat while zinc notched a 2 percent gain. September copper slipped 4.05 cents to close at $3.581 a pound on the Nymex.

July 12, 2007 5:35 PM