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Gold extends gains as dollar dips in choppy trading

Published 05/20/2012, 09:18 PM
Updated 05/20/2012, 09:20 PM
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Investing.com - Gold prices rose in Asian trading on Monday in a jumpy session, as the precious metal still saw support on a recent report the U.S. Federal Reserve won't rule out stimulating the economy via monetary easing measures, although the metal sought to look for a new weather vane.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded up 0.16% at USD1,594.45 a troy ounce.

Gold traded at a low of USD1,590.25 a troy ounce and hit a high of USD1,597.35 a troy ounce during the session.

Gold futures were likely to test support at USD1,567.85 a troy ounce, the low on May 18, and resistance at USD1,642.95, the high from May 7.

Last week, the U.S. Federal Reserve released the minutes of its latest monetary policy meeting, in which members suggested they'd favor jolting the economy with easing policies should recovery deviate from its road to recoery.

"Several members indicated that additional monetary policy accommodation could be necessary if the economic recovery lost momentum or the downside risks to the forecast became great enough," the Federal Reserve minutes read.

Stimulus measures tend to weaken the dollar, and talk that monetary policy authorities are even considering them sent gold rising and the greenback falling.

The Fed's comments buoyed the precious metal for several sessions including early Monday morning in Asia, as investors nervously looked ahead to home sales data due out in the U.S. later this week.

The metal did jump around quite a bit as the market sought more updated steering currents than the Federal Reserve comments.

Elsewhere on the Comex, silver for July delivery was down 0.45% and trading at USD28.587 a troy ounce, while copper for July delivery was up 1.21% and trading at USD3.485 a pound.







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