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Gold Bugs Show Resilience By Nick Godt
May 26, 2006
The metals complex was having a volatile session Friday, but prices were higher around midday, tracking a rise in crude oil prices.
Gold for June delivery was recently up $2.50 at $651 an ounce, after hitting a low of $640.50 earlier in the session. Other metals also rebounded from morning pressure. Silver for July delivery was up 4 cents to $12.64 an ounce, and the July copper contract was gaining 4 cents to $3.75 a pound.
As oil prices again neared $72 a barrel, gold, which acts as a hedge against inflation, received a lift. The front-month crude contract was lately higher by 53 cents to $71.85. Oil topped $75 a barrel last month amid tension over Iran's nuclear ambitions, and the run-up also helped fuel an ascent in gold.
Lending additional support to gold, which is often perceived as a safe haven, were reports of shots being fired in a Capitol Hill building that houses offices for members of the House of Representatives.
Gold has firmed during the last two days of the trading week, but metals have largely been in a two-week downturn as concerns built that global central banks are lifting interest rates to curb growth and inflation, notably from soaring commodities prices.
According to Nell Sloane, a metals analyst at NSFutures.com, the recent weakness in the sector attracted bargain-hunters in Asia overnight, which "combined with the upward bias in energies for a mostly bullish condition."
Meanwhile, shares of miners were mixed in recent action. The Philadelphia Gold and Silver index was up 0.2%, and the Amex Gold Bugs index was gaining 0.5%, but the CBOE Gold index was down 0.1%.
Among the biggest gainers, Glamis Gold ( GLG:NYSE - commentary - research - Cramer's Take) was up 1.6%, Coeur d'Alene ( CDE:NYSE - commentary - research - Cramer's Take) was ahead by 1.3%, and Newmont Mining ( NEM:NYSE - commentary - research - Cramer's Take) was adding 0.8%.
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