Gold prices climbed this afternoon as the US dollar – which has an inverse relationship with the yellow metal – fell after the Labor Department reported an unexpected decline in America’s import prices.
The data showed that prices fell 0.6 percent in July, while expectations were for an increase. The fall in import prices give the Federal Reserve more room for stimulus action.
It has been speculated that the Fed could launch a third round of quantitative easing as soon as in September to shore up the sluggish recovery.
More stimulus would hit the US dollar and boost gold’s appeal as an inflation hedge.
Earlier in the session, the US dollar was on the rise after China said its trade surplus declined in July as growth in exports dropped to only one percent from 11.3 percent in the previous month, boosting the greenback’s safe-haven apeal.
Gold traded at US$1,625/oz this afternoon, up US$8 from Thursday’s close. Silver moved in the same direction as gold, rising 10 cents to US$28.24/oz, while platinum dropped US$9 to US$1,399/oz.
Today’s top risers in the sector were:
Conroy Gold (LON:CGNR), up 9.5 percent at 1.95 pence at midday
Cluff Gold (LON:CLF), up 8.5 percent at 56.35 pence
Caledonia Mining (LON:CMCL), up 7 percent at 5.5 pence
Greatland Gold (LON:GGP), up 6.5 percent at 0.668 pence
Arian Silver (LON:AGQ), up 4.5 percent at 15.3 pence
The top fallers were:
ECR minerals (LON:ECR), down 5 percent at 0.653 pence at midday
Kolar Gold (LON:KGLD), down 5 percent at 7 pence
