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Metals Rally On Euro Zone’s Debt Concerns

26 May 2011

Gold Futures and other metals gained on Wednesday’s trading session as the US dollar rebounded after reaching its highs making base metals attractive for investors. Silver futures contract also jumped 3 percent in today’s rally.

Gold futures contract for June delivery gained 0.40 percent or $5.50 to $1,528.80 per ounce in Comex trading session of New York Mercantile Exchange. The contract reached its low of $1,521.30 per ounce when the greenback surged.

The investors were uncertain about the Greece’s debt situation, moreover lower durable good order also created more uncertainty.

Analysts from VTB Capital in London commented, “We think that gold will remain well supported in the short term amid small-scale safe haven buying, and still in the absence of a substantial pick-up in physical demand.”

News that affected the gold trading was the substantial increase in gold imports of India which are expected to reach 1,000 metric ton this year.

Analysts from Commerzbank commented, “Strong monsoon rainfall increases the income of the rural population, who are major buyers of gold jewellery in the world’s largest gold consumer country.”

The dollar index DXY which measures the US dollar’s performance against the its six major counterpart currencies traded at 76.978 on Wednesday as compared to 75.915 on Tuesday’s North American trading session.

Silver futures contract for July delivery gained 3.3 percent or $1.20 to $37.36 per ounce. The contract surged 3.5 percent in yesterday’s session.

Copper futures contract for July delivery also soared 2.4 percent or $0.09 to $4.11 per ounce in electronic trading session of NYMEX

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