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Gold futures trade in tight range as weak U.S. dollar supports

Published 06/02/2011, 10:23 AM
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Investing.com – Gold futures fluctuated between small gains and losses on Thursday, as prices remained supported by a weaker U.S. dollar and growing fears over the U.S. economic recovery. 

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,538.65 a troy ounce during U.S. morning trade, edging 0.14% lower.          

The August contract traded between a range of USD1,536.75, the daily low and USD1,545.45, the daily high.

Earlier in the day, the U.S. Labor Department said the number of people who filed for unemployment assistance in the U.S. last week fell less-than-expected, declining to a seasonally adjusted 422,000. Analysts had expected jobless claims to fall by to 420,000.

Separately, the U.S. Census Bureau said factory orders in April fell by a seasonally adjusted 1.2%, disappointing expectations for a 0.7% decline. 
 
Meanwhile, data on Wednesday showing that U.S. private-sector employment growth slowed sharply in May, while manufacturing activity slumped to a one-year low reinforced expectations that the Federal Reserve will not tighten policy for some time to come and sparked speculation that the central bank may go ahead with further quantitative easing measures in the months ahead.

The dollar index was down 0.45% to trade at 74.57, after earlier dropping to a one-month low of 74.35. Gold prices often move inversely to the U.S. dollar, as gold becomes less expensive for buyers using other currencies.

Elsewhere, fears over a Greek default continued after ratings agency Moody's cut Greece's sovereign rating from B1 to Caa1, only four notches above the default level. The outlook on the new rating is negative, in a sign that another downgrade is likely in the short-to-medium term.
 
Silver for July delivery added 0.2% to trade at USD36.87 a troy ounce during U.S. morning trade, while copper for July delivery shed 0.3% to trade at USD4.077 a pound.

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