NEW YORK (AP)
Gold prices resumed their climb Tuesday, boosted by a drop in the U. S. dollar to a new low against the euro. In other commodities markets, energy and industrial metals prices fell, and grains edged higher. Gold and silver had slipped Monday as traders cashed in profits from steep rises last week. But with the euro rising to another record Tuesday and the British pound climbing to another 26-year high against the U.S. currency, the precious metals got a second wind. The dollar, struggling under worries about the weak U.S. housing market and rising loan defaults, has been falling to fresh record lows against the euro and multi-decade lows against the pound for several weeks now. It recently reached a two-month low versus the yen. The U.S. currency is traditionally considered a safe investment, so when it drops, investors in search of another safe asset often turn to gold. "It appears that renewed weakness in the dollar is probably the main culprit today," said HSBC precious metals analyst James Steel. "Every time it falls further, it'll have another impact. The further it goes, the stronger gold will be." He added that gold was also supported by stocks plunging, credit-related concerns driving investors to safer assets, and technically motivated buying, prompted by gold's ability to stay above the $680-an-ounce level. August gold rose $3.30 to end at $684.80 an ounce on the New York Mercantile Exchange. September silver rose 11.3 cents to finish at $13.443 an ounce. However, October platinum slipped $8.30 to settle at $1,333.60 an ounce, as miners at two South African platinum mines returned to work after a wage deal was reached Monday night, said BNP Paribas. The Dow Jones industrial average fell about 226 points. Gold's rise was dampened, however, by a second straight day of plunges in energy prices, which frequently trigger selling in other commodities. On the Nymex, crude oil futures for September delivery dropped $1.33 to settle at $73.56 a barrel. August gasoline futures fell 5.64 cents to settle at $2.0477 a gallon. Crude oil began tumbling from 11-month highs reached last week on Monday. Prices fell on media reports that OPEC's research head Hasan Qabazard said a fair price for crude oil is between $60 and $65 a barrel, and that OPEC President Mohammed al-Hamli said the group is worried about the effect of higher oil prices on the world's economy. "It was the first time this year that OPEC has shown any willingness toward flexibility," wrote Cameron Hanover's Peter Beutel in a note. The Organization of Petroleum Exporting Countries meets in September to decide whether to increase output. Energy prices also fell as traders positioned themselves ahead of today's inventory report from the U.S. Energy Information Administration, which is expected to show crude oil stockpiles fell last week but gasoline supplies grew. Nymex natural gas for August fell 17.6 cents to settle at $5.863 per 1,000 cubic feet, extending Monday's 40-cent decline as traders bet that milder weather will help curb energy use in the United States. Utility companies use natural gas, among other fuels, to create power. Meanwhile, in Chicago, wheat soared but soybeans and corn rose only slightly after sharp drops Monday. Though the U.S. wheat crop has been poor, many traders think the corn and soybean crops may end up being better than anticipated. Wheat for September delivery rose 21.75 cents to finish at $6.4200 a bushel. December corn advanced 1.25 cents to close at $3.2675 a bushel. November soybeans added 4. 50 cents to end at $8.4550 a bushel. Overseas, industrial metals were mixed on the London Metal Exchange, weighed down in part by the sell-off in the energy markets. A few strike resolutions at some key copper facilities also weakened prices, according to futures and options broker MF Global. Nickel, copper and lead ended lower on the LME. Aluminum finished flat, while zinc and tin rose. Nymex copper for September fell 3.70 cents to settle $3.6195 a pound.
