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Gold rises on technical bounce, weaker U.S. dollar

Xinhua, September 15, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Wednesday as technical trading and a weaker U.S. dollar gave support to the precious metal.

The most active gold contract for December delivery rose 2.4 U.S. dollars, or 0.18 percent, to settle at 1,326.1 dollars per ounce.

Traders took profits on their short positions, giving a boost to the precious metal after it fell for four sessions in a row.

Analysts believe that weakness in the U.S. dollar spurred the precious metal as the U.S. Dollar Index, a measure of the dollar against a basket of major currencies, fell by 0.33 percent to 95.26 as of 1730 GMT.

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.

Additionally, analysts believe the market will be given further hints to the direction of the U.S. economy after the Thursday release of several key economic indicators, including the weekly jobless claims, the producer price index, retail sales, and industrial production reports. The consumer price index will be released on Friday.

The precious metal was further buoyed up as a report released by the U.S. Department of Commerce showed import and export prices declining by 0.2 percent and 0.8 percent respectively.

This is a sign of little inflation on the trade side of the U.S. economy and is likely to give the doves more ammunition against a rate hike at the upcoming FOMC meeting next week.

U.S. equities remained at a weaker level on Wednesday after Tuesday's sharp decline. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

Silver for December delivery rose 9.1 cents, or 0.48 percent, to close at 19.066 dollars per ounce. Platinum for October delivery added 4.9 dollars,or 0.47 percent, to close at 1,040.90 dollars per ounce. Endit